Texas Vet Loans Requirements

Service Requirements for Eligibility 

• Peacetime Active Duty Service: A minimum of 181 days of active duty service during peacetime is required. 
• Wartime Active Duty Service: For those who served during wartime, a minimum of 91 days of active duty service is necessary. 
• Reserves or National Guard Service: A commitment of at least 6 years is required for members of the Reserves or National Guard. 
• Spouses: Spouses of service members who died in the line of duty are also eligible for these loan programs.

Certificate of Eligibility (COE)  

• Importance: The COE is a vital document for the application process. It proves to lenders that you meet the minimum service requirements for VA loan benefits. 
• How to Obtain: Veterans can apply for a COE through the VA’s eBenefits portal. As an approved lender, we have access to the VA portal which will allow us to pull this on your behalf. 

Income Requirements and Debt-to-Income Ratio 

• Residual Income Calculation: Unlike conventional loans that typically use the debt-to-income ratio (DTI), Veteran Mortgages focus on the residual income calculation. This method assesses whether a veteran has sufficient income to cover living expenses, including mortgage, housing expenses, taxes, and other debts, ensuring financial stability post-mortgage commitment. 

Credit Requirements 

• Minimum Credit Score: While the VA itself does not mandate a minimum credit score, lenders often set their own criteria. Our minimum credit score for a VA Loans in Texas is 550, accommodating a broader range of borrowers. 
• Bankruptcy Considerations:
  • Chapter 7 Bankruptcy: Discharges over 2 years old may generally be disregarded. For discharges between 1 to 2 years, an analysis of credit risk is required to ascertain VA loan eligibility. Bankruptcies discharged within the past 12 months typically preclude a clear determination of creditworthiness. 
  • Chapter 13 Bankruptcy: Eligibility under Chapter 13 requires at least 12 months of consistent payment history and approval from the Bankruptcy Judge for any new credit. 
• Foreclosure: Past foreclosures do not necessarily disqualify you. A foreclosure finalized more than 2 years prior to the new home purchase may be disregarded. If the foreclosure was finalized between 1 to 2 years from the purchase date, the lender will assess the credit risk in accordance with VA guidelines to determine eligibility. 

Understanding these requirements and preparing accordingly can significantly ease the process of applying for a Texas Vet or VA Mortgage. For veterans and service members, these loan programs offer a pathway to homeownership with considerations that acknowledge their service and sacrifice.