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VA Home Loans Guidelines

Review the VA Home Loan Guidelines and requirements for using Veteran benefits for home financing.

If you are or have been in the military (including the Reserves or National Guard), you may meet the VA Loan Eligibility. The Department of Veterans Affairs, commonly referred to as the VA, has made home ownership easier for veterans (and in some cases their surviving spouses) through its loan guarantee program.

If you qualify under the guidelines, you can buy a home with little or no down payment and often at a lower interest rate than conventional fixed-rate mortgages.

While the VA does not actually lend the money, it assumes some of the risk for the loan. To partially offset this, they charge a "funding fee," which can be paid in cash at closing or can be financed over the life of the loan.

In addition, VA home loans are assumable under certain conditions, which means if you decide to sell your property, the buyer may take over your mortgage with the same interest rate and payments -- a good selling point.

The buyer who assumes the loan does not have to be a veteran. The VA loan often is a very cost-effective alternative for veterans or current military personnel.

There are limits on the amount you can finance. But there is greater flexibility for the payment of closing costs: the seller is allowed to pay all discount points and other closing costs.

What is the maximum loan amount and ratios for VA Loans in Texas?

  • The maximum loan amount is $417,000 in Texas, amounts over this would be considered a VA Jumbo Loan.
  • The max debt to income ratio is 41%.

VA Loans Offer the Following Important Benefits:

  • Equal opportunity for all qualified veterans to obtain a VA loan.
  • There is no PMI (private mortgage insurance).
  • No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
  • Buyer informed of reasonable value from the appraisal.
  • Negotiable interest rate.
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
  • Closing costs are comparable with other financing types (and could be lower).
  • No mortgage insurance premiums.
  • An assumable mortgage.
  • Right to prepay without penalty.
  • VA assistance to veteran borrowers in default due to temporary financial difficulty.

Links for additional VA Loan information:

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Additional links of interest:

VA Loans

Texas VA Loans - VA Loans In Texas

Texas Vet Loans