If you are a veteran or an active-duty service member looking to buy or refinance a home in Texas, you have two powerful loan options:
VA Home Loan – A federally backed mortgage program available across the United States.
Texas Vet Home Loan Program – A state-specific program designed exclusively for Texas veterans, also known as TXVLB or Texas Vet Loan.
Both programs offer great benefits, such as competitive interest rates and flexible qualification requirements. However, one of the most crucial distinctions between them is how interest rates are determined. This factor alone can have a significant impact on your overall mortgage cost.
In this guide, we’ll break down the differences between these two programs, their benefits, and how to determine which is best for your situation.
At our firm, we take a systematic approach to ensure you make the best financial decision. Our process includes:
Pre-Approval: We assess your eligibility and determine how much you qualify for under each program.
Side-by-Side Comparison: We provide detailed loan estimates so you can compare costs, interest rates, and benefits.
Personalized Consultation: Every borrower has unique financial goals, and we guide you in choosing the loan that aligns best with yours.
While both VA and Texas Vet loans offer incredible benefits, the ideal choice depends on factors such as your credit score, loan amount, and eligibility for rate discounts.
The VA Home Loan is a federal program backed by the U.S. Department of Veterans Affairs (VA). It is designed to help eligible veterans, active-duty service members, and surviving spouses achieve homeownership with favorable loan terms.
No Down Payment: You don’t need to put money down, making homeownership more accessible.
No Private Mortgage Insurance (PMI): Unlike conventional loans, VA loans do not require PMI, saving you hundreds of dollars per month.
Nationwide Availability: The program is available in all 50 states and U.S. territories.
Flexible Credit Requirements: VA loans do not have a credit score requirement compared to conventional loans.
No Maximum Loan Limit: Recent policy changes allow veterans to borrow as much as they qualify for based on lender guidelines.
Interest Rates Set by Private Lenders: VA loan rates fluctuate based on market conditions, borrower financial profiles, and lender policies.
The Texas Vet Home Loan Program is managed by the Texas Veterans Land Board (VLB) and is exclusively available to Texas veterans. This program provides additional benefits tailored to Texas veterans.
Lower Interest Rates: The VLB subsidizes rates, often making them lower than standard VA loan rates.
Primary Residences Only: Unlike VA loans, Texas Vet loans can only be used for primary home purchases or refinancing in Texas.
Eligible for Home Purchases and Certain Refinances: You can use this loan for buying a home or paying off a construction loan.
Extra Discounts for Disabled Veterans: Veterans with a service-connected disability of 30% or more get an additional interest rate discount, usually around 0.5% lower than the standard Texas Vet rate.
The Texas Vet program can be a great option for veterans looking for lower interest rates and long-term savings. However, it does have some limitations, such as loan amount caps based on funding availability.
One of the most critical distinctions between VA and Texas Vet loans is how interest rates are determined. Here’s how they compare:
VA Home Loans: Rates are set by private lenders and can vary based on your credit score, lender policies, and market conditions.
Texas Vet Home Loans: Rates are set and managed by the VLB, typically lower than standard VA loan rates due to state subsidies.
VA Home Loans: Rates vary widely between lenders, so borrowers must shop around for the best terms.
Texas Vet Home Loans: Rates are standardized and published by the VLB, making them more predictable.
VA Home Loans: No additional rate discounts for disabled veterans.
Texas Vet Home Loans: Veterans with a 30% or higher service-connected disability receive an extra 0.5% rate reduction.
The right loan depends on your financial goals and unique circumstances. Consider these factors:
✅ You qualify for the service-connected disability discount, reducing your rate further. ✅ The VLB interest rate is lower than what private lenders offer for VA loans. ✅ You want stable, predictable interest rates without shopping around. ✅ You are buying a primary residence in Texas and want access to the lowest possible rate.
✅ You need a higher loan amount than what the Texas Vet program allows. ✅ A private lender offers competitive rates that are equal to or better than the Texas Vet Loan. ✅ You are buying a home outside of Texas or refinancing under a broader VA program.
Both options provide valuable financial benefits, but the Texas Vet Loan is often the best choice for veterans who qualify for its lower interest rates. However, VA loans offer more flexibility in terms of loan amounts and refinancing options.
As a veteran, you’ve earned the right to access these outstanding loan programs. Making the right choice can save you thousands of dollars over the life of your mortgage.
To make an informed decision, consider:
Comparing both options – We provide detailed estimates to help you see which loan is more beneficial.
Thinking about your long-term financial goals – Do you need a lower rate, higher loan amount, or more refinancing options?
Speaking with an expert – Our team specializes in VA and Texas Vet loans, and we can guide you through the process.
If you have questions or need personalized assistance, reach out to Shirley Mueller and her team today. We’re here to help you secure the best possible loan for your home purchase or refinance.
For help, questions or to see what you qualify for, give us a call!
CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loan in Texas. NMLS License #3029 | MB.803095 | NMLS Consumer Access | CFPB
Sr. VP of Veteran Lending Specializing in Texas Vet & VA Loans NMLS ID: 336103
6601 Vaught Ranch Rd, Suite 101 I, Austin, TX 78730
**The advertised rates and points listed are subject to change at any time without prior notice and may not be available to all borrowers. These rates are predicated on specific assumptions and lending scenarios. The actual rate available to you can vary depending on your personal details, such as your credit score, the amount of the loan, your down payment, and our internal lending criteria. The rates provided are for a fixed rate mortgage, but they will differ depending on the loan term and property location. Additional rates, points, and loan terms might be available. Approval of all loans is contingent on credit and property evaluations. Property insurance is mandatory, and flood insurance might also be necessary.
Interest rates for the Texas Vet program are set weekly by the Texas Veterans Land Board and are subject to change based on when you lock your interest rate. Annual Percentage Rate (APR) represents the true yearly cost of your loan, including any fees or costs in addition to the actual interest you pay to the lender. Click HERE for an example.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact CrossCountry Mortgage for current rates and for more information.
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