TL;DR summary
- The Texas Vet home loan, from the Texas Veterans Land Board, is offered in conjunction with a VA, FHA or conventional loan, so it's a partner to the VA loan rather than a rival.
- The VA loan brings no down payment requirement and no monthly mortgage insurance, with a one-time funding fee that many disabled veterans don't pay.
- The Texas Vet loan lends up to $832,750 at its own fixed rate, and veterans with a VA disability rating of 30% or more qualify for a discounted rate.
- Each has its own eligibility rules, and the Texas Vet loan adds Texas residency, so checking both early shows you which doors are open.
Not a showdown. A two-step.
You've got two benefits with your name on them, two sets of paperwork, and a nagging feeling that you're supposed to pick one and live with it forever. Pick wrong, and you leave something you earned sitting on the table.
Good news: you probably don't have to pick.
Most comparison pages set these two up like a showdown at high noon. They work more like partners on a dance hall floor. (This is Texas, after all. Even the home loans two-step.)
The VA loan is a federal benefit. The VA doesn't usually lend you the money; it backs a home loan made by a private lender, and that backing is what makes the VA loan's best features possible.
The Texas Vet home loan is a state benefit. The Texas Legislature created the Veterans Land Board's housing program in 1983, and today the Veterans Land Board describes its home loan as offered in conjunction with a VA, FHA or conventional loan, through participating lenders. (Translation: it comes with a partner.) The program funds itself with bonds, not taxpayer money, and it sets its own interest rate.
Any page that makes you choose between them is asking the wrong question. For many Texas veterans, the VA loan is the natural partner.
What this means for you: the real question is "which loan do I pair the Texas Vet loan with, and does pairing it help me?"
1. Partners, not rivals
The Texas Vet loan is offered in conjunction with a VA, FHA or conventional loan.
2. Up to $832,750
That's the Veterans Land Board's maximum on a Texas Vet home loan.
3. 30% rating
A VA disability rating of 30% or more earns a discounted Texas Vet rate.
What the VA loan brings to the floor
The VA describes its home loan program as one that doesn't require a down payment or monthly mortgage insurance. Those two things are why it's so popular, and why it so often takes the lead.
In place of mortgage insurance, most VA buyers pay a one-time VA funding fee. You can pay it at closing or include it in the loan. The size depends on your loan amount, whether it's your first time using the benefit, and how much you put down.
And plenty of people don't pay it at all. The VA lists who's exempt, including:
- Veterans receiving VA compensation for a service-connected disability, or eligible for it but receiving retirement or active-duty pay instead.
- Surviving spouses receiving Dependency and Indemnity Compensation.
- Service members with a proposed or memorandum rating, before closing, showing they're eligible for compensation.
- Active-duty service members who show they received a Purple Heart on or before closing.
The VA also notes that a funding fee can be refunded if a disability award later comes through with an effective date before your closing. Everything else on your closing statement is covered in Texas closing costs.
What this means for you: if a claim is still working its way through, that's worth knowing (and worth keeping the paperwork for).
The partner that picks its own music
The Veterans Land Board says eligible veterans, military members and their spouses can borrow up to $832,750 on a fixed-rate Texas Vet home loan, with little or no down payment.
Its interest rate is the Veterans Land Board's own, not your lender's, and the board can adjust its base rate on the first business day of each week. Picture a dance hall where the board can change the song at the start of every week. Veterans with a VA service-connected disability rating of 30% or greater qualify for a discounted rate on top of that.
A few house rules before you step out:
- The home is your primary residence in Texas, and the Veterans Land Board asks that you move in within 60 days of closing and keep it as your primary residence for at least three years.
- Single-family homes, townhomes and condos qualify; duplexes and other multi-family homes need to be at least five years old at closing.
- It's for buying, not refinancing, and it can't be used as a down payment on another loan.
- Once a Texas Vet home loan is paid off, you can get another one.
Because the board can change the song week to week, comparing it against the VA loan on its own is something worth doing with real numbers on the day you're ready.
Checking the dance cards
Each partner checks something different before you step onto the floor. The biggest difference: the Texas Vet loan asks for Texas residency, and the VA loan doesn't.
| What's checked | Texas Vet home loan | VA home loan |
|---|---|---|
| Age and residency | At least 18, and a bona fide, legal Texas resident when you apply | No state residency rule |
| Service (main paths) | Active-duty member; Texas National Guard member; reservist with 20 qualifying years for retirement; or veteran with at least 90 active-duty days (fewer if discharged for a service-connected disability) | Service members with 90 continuous days; veterans since August 2, 1990, with 24 continuous months or the full period called up (at least 90 days); Guard and Reserve members, including after 6 creditable years |
| Discharge | Honorable, general or medical; other discharges can qualify with a VA certificate of eligibility | Other-than-honorable discharges can ask the VA for a review |
| Surviving spouses | Spouse of a veteran missing in action or whose death was service-connected | Spouses receiving certain survivor compensation, or of a service member missing in action or held as a prisoner of war |
| The paperwork | A Veterans Land Board certification of eligibility | A VA certificate of eligibility (COE) |
These are the main paths, not every one. Both programs also look at credit and income through the lender, and the VA notes its own credit, income and occupancy requirements.
What this means for you: if your service history has a wrinkle, a different era, a Guard or Reserve record, a discharge type you're unsure about, don't rule yourself out on a guess. That's exactly the kind of thing worth talking through first.
When the two-step turns into a line dance
This is where it gets good. A Texas veteran with a VA disability rating of 30% or more may line up three benefits on one purchase: the VA loan's no-down-payment structure, an exemption from the VA funding fee if they're receiving disability compensation, and the Texas Vet loan's discounted rate.
That's not a two-step anymore. That's a line dance.
Not every file works that way, and that's fine. Sometimes the Texas Vet loan pairs better with an FHA or conventional loan, and sometimes the plain VA loan on its own is the cleaner fit. Some nights you dance solo, and it's still a good night.
If this is your first home, Texas has other help too, including programs built for veterans and service members. See Texas first-time home buyer programs for those.
You did the hard part a long time ago. These benefits exist because of it, and nobody who served should leave one sitting on the table because two names sounded like a choice.
The best version of this decision happens side by side, with your actual service record, your county and your numbers on the table. Then you'll know whether you're stepping out solo or with a partner.
Before you apply
- Request your VA certificate of eligibility, or ask your lender to request it for you.
- Apply for the Veterans Land Board's certification of eligibility if you're a Texas resident.
- Find your DD214 or other service records.
- Check your current VA disability rating and whether you receive compensation.
- Plan to live in the home as your primary residence for at least three years if you use the Texas Vet loan.
