In 1983, the Texas Legislature created the Texas Veterans Land Board (VLB) Veterans Housing Assistance Program (VHAP) to assist Texas Veterans in purchasing a home. The main goal of this program is to help Texas Veterans, military members and their families save money on their home mortgages and here are some of the ways the VLB and other organizations help them do that:
- Eligible Texas Veterans and military members can take advantage of their federal housing benefits through the U.S. Department of Veterans Affairs (VA), and their state benefits through the VLB, at the same time. The VLB’s interest rate on a VA-backed home loan is very competitive with other home loan interest rates. Through the VLB program Veterans with a VA disability rating of 30% or greater receive an even better interest rate with an additional .50% reduction on the existing VLB interest rate.
- Texas Veterans with a 10% or greater service-connected disability rating from the VA are eligible for property tax exemptions. A full property tax exemption is available for Veterans with a 100% disability rating from the VA. To learn more about these exemptions click here and here. If a Veteran qualifies for a property tax exemption they may have more monthly income to qualify for a mortgage.
- Texas Veterans with a VA disability rating of at least 10% don’t have to pay the VA funding fee at closing. The VA funding fee can be between 1.25% and 2.15% of the loan amount for a Veteran’s first VA-backed mortgage. The fee variation is dependent on the amount of the down payment.
- The VLB’s participating home loan lenders typically require that Veteran borrowers have at least a minimum credit score of 620 to qualify for a VLB home loan of up to $484,350.
- Texas Veterans who want to build a new home must first obtain a construction loan to pay the home builder. While the VLB can’t pay a home builder directly, it can fund the mortgage on a completed home. Most banks and credit unions that offer home construction loans typically require the borrower to have excellent credit history and pay a security deposit of at least 10% to 20% of the construction cost.
- A Texas Veteran or military member may roll a land loan into a VLB home loan on a newly constructed home at a total not to exceed $484,350. A Texas Veteran or military member who has a balance on a land loan — whether through the VLB or a private lender — may pay off that land loan with a VLB-funded home loan once new construction is complete. Alternatively, an existing home located on acreage may be surveyed in a manner that allows a Texas Veteran or military member to take advantage of their home and land loan benefits simultaneously.
To determine how much house you can afford, the VLB recommends that Texas Veterans and military members visit a VLB-Approved Home Loan Lender and get pre-approved for a home loan prior to beginning their home search. Once you’ve been pre-approved for a mortgage loan, it’s important to connect with a VLB-Approved Real Estate Professional who can help you find the home of your dreams. To learn more about the VLB Veterans Housing Assistance Program please visit TexasVeterans.com or call our Texas Veterans Call Service Center at 1–800–252–8387 (VETS) or send us an email.