VA Loans Texas | No Overlays, No Minimum Credit Score

Start Your VA Pre-Approval

Soft credit pull. No SSN to start.

Who You’re Actually Working With

J.D. Peck — NMLS #314883. 25+ years originating. 3,100+ closed loans. Scotsman Guide Top Originator, 2026. Based in Colorado Springs, in the middle of one of the densest military markets in the country — Fort Carson, Peterson Space Force Base, Schriever Space Force Base, and the Air Force Academy. VA files are not a sideline here. They are the practice.

In the Press

“When the underwriting is done correctly, VA loans are one of the most powerful lending solutions for military borrowers.”

— J.D. Peck, quoted in Chrisman Commentary, August 12, 2026, on PRMG’s recognition as a Top VA Lender in Scotsman Guide’s 2026 rankings.

The VA does not set a minimum credit score. Lenders do. We do not.

What “No Overlays” Means

An overlay is a credit rule a lender adds on top of VA’s. We don’t add them — we underwrite to VA guidelines. Separate from underwriting, every VA loan must also be eligible for sale or securitization, and Ginnie Mae sets pooling requirements that apply to all lenders and that no lender can waive. Refinances in particular carry seasoning requirements under Ginnie Mae that are broader than VA’s. We’ll tell you upfront if one applies to you.

No State-Specific VA Overlay

Texas adds no state-level restriction to VA purchase financing. The federal rules apply as written. Note that the Texas Constitution does place strict limits on home equity borrowing under Section 50(a)(6), but that governs cash-out and HELOC products — not a standard VA purchase.

100% Disabled Veterans Pay No Property Tax on Their Homestead

Under Texas Tax Code Section 11.131, a veteran rated 100% disabled by the VA — or granted individual unemployability — is exempt from property tax on the total appraised value of their residence homestead. In a state with property tax rates this high, that single benefit can change what you can afford by hundreds of dollars a month.

Partial Disability Ratings Get a Tiered Exemption

Under Tax Code Section 11.22, veterans with a service-connected rating below 100% receive a fixed exemption: $5,000 at 10–29%, $7,500 at 30–49%, $10,000 at 50–69%, and $12,000 at 70–100%. Veterans age 65 or older with at least a 10% rating also qualify for the $12,000 exemption, as do those who are totally blind or have lost use of a limb.

Surviving Spouses Keep the Exemption

An unremarried surviving spouse keeps the 100% exemption as long as the property was the veteran’s residence homestead at the time of death and remains the spouse’s homestead. A surviving spouse who remarries and moves carries forward only the dollar amount of the last exemption, not a full one.

No Minimum Credit Score Overlay

The VA handbook sets no credit score floor. Most lenders impose 580, 600, or 620 anyway. We do not. If automated underwriting returns a refer, that is the start of a manual underwrite — not the end of the file.

Manual Underwriting When It Makes Sense

A refer is not a denial. We build the file on compensating factors the VA actually recognizes: residual income well above guideline, clean housing history, reserves, and documented explanations for past credit events.

Residual Income Is the Real Test

VA underwriting cares what is left over after every bill is paid, not just your debt-to-income ratio. Texas having no state income tax works in your favor here — more take-home pay means stronger residual income on the same salary.

$0 Down, No Monthly Mortgage Insurance

With full entitlement there is no hard purchase cap and no monthly MI — ever. That is the structural advantage VA holds over FHA and low-down-payment conventional, and it compounds every month you own the home.

We Work the Whole State

Houston, Dallas–Fort Worth, San Antonio, Austin, El Paso, Killeen, Corpus Christi, Lubbock, Amarillo, the Rio Grande Valley, and every Texas market in between.

Straight Answers on Timing

A VA purchase closes on a normal timeline. If something in your file will slow it down — an appraisal repair, a COE issue, an entitlement restoration — you hear it early, not the week of closing.

Purchase, First-Time Use

2.15% of the loan amount with less than 5% down. 1.5% with 5% or more down. 1.25% with 10% or more down.

Purchase, Subsequent Use

3.3% with less than 5% down. 1.5% with 5% or more down. 1.25% with 10% or more down.

VA IRRRL Streamline Refinance

0.5% flat, regardless of prior use.

Exempt Entirely

Veterans receiving VA disability compensation at any rating, veterans entitled to compensation who take military retirement pay instead, surviving spouses receiving DIC, and Purple Heart recipients on active duty. The exemption shows on your COE — we verify it before you pay anything.

The 4% is not the seller’s limit. It is the limit on one specific bucket. The other bucket has no VA cap at all.

Bucket 1: Your Closing Costs — No VA Cap

The seller can pay all of your normal, allowable closing costs. Origination, appraisal, title, recording, credit report, and prepaid taxes and insurance at customary levels. The VA places no percentage ceiling on this. Market-normal discount points to permanently buy down your rate also fall here — uncapped.

Bucket 2: Concessions — Capped at 4% of Reasonable Value

Anything of value the seller gives you beyond normal closing costs is a concession, and those are capped at 4% of the property’s VA reasonable value. Critically, this 4% sits on top of Bucket 1 — it does not replace it.

Paying Off Your Debt — The One Nobody Uses

The seller can pay off your credit cards, collections, judgments, or an auto loan, and it counts against the 4%. This is the single most powerful tool in VA structuring. A $450-a-month car payment eliminated can move a debt-to-income ratio from declined to approved — without you spending a dollar of your own savings. On a $400,000 home, the 4% allowance is large enough to wipe out most consumer debt loads entirely.

Breaking a Lease So You Can Buy Now

This is the one that changes timelines, and it is the most underused tool in VA structuring. You are renting off post — or sitting in on-post housing — and the right home comes up six months before your lease ends. Early termination is commonly two months’ rent, and paying that out of pocket on top of moving costs is what makes most renters wait another year. They do not have to wait. A seller can cover the lease-break penalty as a concession inside the 4% allowance. We have structured this hundreds of times. You buy when the right house is actually on the market instead of when your landlord says you may — which is the whole ballgame in high-turnover markets like Fort Hood, Fort Bliss, and Joint Base San Antonio, where good inventory does not sit around waiting for a lease to run out.

Prepaying Your Mortgage Payments

A seller can prepay your actual mortgage payments — not just taxes and insurance, the full payment. Inside the 4% allowance that can mean several months of PITI covered before you make your first one out of pocket. For a service member who just paid to move, or a family carrying a lease-break fee and a new payment in the same month, that runway is the difference between buying now and buying next year. It is also the concession sellers understand fastest, because it costs them the same as a price cut and does far more for the buyer.

The VA Funding Fee

At 2.15% on a first-use purchase, the funding fee alone can consume a meaningful share of the 4%. The seller can absorb it entirely — which matters most for veterans who are not exempt.

Temporary Rate Buydowns

A 2-1 buydown escrow lowers your payment in years one and two. The escrow deposit counts toward the 4%. Useful when you expect income to rise, or when you plan to refinance if rates fall.

Prepaids Beyond Customary, and Gifts of Personal Property

Escrow funding above ordinary levels, or personal property left with the home, count as concessions rather than closing costs.

Debt dragging your DTI down?

Send us the debts and the purchase price. We will show you exactly what a seller can legally cover, what it does to your ratios, and how to write it into the offer so it survives underwriting.

San Antonio

Joint Base San Antonio. Converse, Schertz, Cibolo, Universal City, Live Oak, and New Braunfels.

Killeen and Central Texas

Fort Hood. Killeen, Harker Heights, Copperas Cove, Belton, Temple, and Nolanville. Among the strongest zero-down markets in the country.

El Paso

Fort Bliss. El Paso, Socorro, Horizon City, Canutillo, and San Elizario.

Dallas-Fort Worth

Naval Air Station Fort Worth. Fort Worth, Arlington, Mansfield, Burleson, Crowley, and Denton.

Houston and the Gulf Coast

Ellington Field. Houston, Katy, Pearland, League City, Friendswood, and Texas City.

Corpus Christi and the Coastal Bend

Corpus Christi, Portland, Ingleside, and Rockport. Coastal wind coverage gets checked before the offer here.

1. Certificate of Eligibility

We pull your COE electronically in most cases. It confirms entitlement and shows any funding fee exemption. You usually do not need to do anything.

2. Pre-Approval

Soft credit pull to start. We look at income, residual income, and housing history before we look at your score. You get a real number, not a range.

3. Find the Home

Your pre-approval letter says what it needs to say to win a contract in a competitive Texas market — and nothing that weakens your position.

4. VA Appraisal and MPRs

A VA appraiser assigns value and confirms the home meets Minimum Property Requirements. In Texas that most often means roof condition, HVAC in working order, and no active infestation. Repairs can often be negotiated to the seller.

5. Underwriting

If automated underwriting approves, we move. If it refers, we manually underwrite. Either path ends in a decision, not a shrug.

6. Close

Sign, fund, and take the keys. Seller concessions can cover closing costs, and the funding fee can be rolled into the loan.

Credit Score

No lender overlay. No minimum. Manual underwriting available when automated underwriting refers.

Down Payment

$0 with full entitlement. A down payment is only required with partial entitlement, or if the price exceeds entitlement plus the county loan limit.

Loan Limits

With full entitlement there is no hard cap. With partial entitlement, the VA uses the 2026 conforming baseline of $832,750 in most Texas counties — higher in a small number of high-cost counties — to calculate any required down payment.

Occupancy

Primary residence. You certify intent to occupy, generally within 60 days. PCS orders and active-duty deployment have their own accommodations.

Property Types

Single family, 2–4 unit if you occupy one unit, VA-approved condos, and new construction. Manufactured housing is possible but narrower.

Mortgage Insurance

None. Not monthly, not ever. This is the single biggest structural advantage over FHA.

Seller Concessions

The seller can pay all of your closing costs, and up to 4% of the loan amount in concessions beyond that — which can cover the funding fee, prepaids, or debt payoff.

PCS With Orders in Hand

You can often be pre-approved before you arrive and close shortly after. We work the timeline backward from your report date rather than starting the week you land.

Buying After a Denial Somewhere Else

A denial from a lender with a 620 overlay tells us almost nothing about whether the VA would approve you. We re-underwrite from the handbook.

Using Entitlement a Second Time

You can hold more than one VA loan at a time if you have remaining entitlement. Common when you PCS out of Killeen or El Paso and keep the first home as a rental.

100% Disabled and Rate-Shopping

Funding fee waived, property tax on the homestead exempt, and no monthly MI. Run the payment before you assume a cash purchase is the better move — often it is not.

Separating in the Next 12 Months

You can use entitlement before you separate. The file needs the right documentation of continuing income, and it needs to be built early.

Self-Employed After Service

Retiring into a business does not have to reset your buying power. We look at how the income is actually documented before deciding which product fits.

A 500 Credit Score VA Approval

The VA handbook sets no score floor. When automated underwriting refers a file this low, the path is a manual underwrite carried by residual income, a clean 12-month housing history, and documented explanations. Most lenders never open the file. See how a 500-score VA file gets built

A 541 Score With Recent Credit Damage

Score alone does not decide it. What decides it is whether the derogatory credit is explained, seasoned, and unlikely to repeat. Read the 541 breakdown

After a Foreclosure or Short Sale

The VA generally looks for two years — and in some short sale cases less, depending on whether you were current at the time. That nuance is where most lenders stop reading. Foreclosure and short sale rules

Open Collections Still on the Report

VA does not automatically require collections to be paid off. Whether they must be depends on balance, type, and how the automated findings treat them. Blanket “pay everything off” advice costs veterans money they did not need to spend. How collections are actually handled

Debt-to-Income Above 50%

There is no hard DTI cap on a VA loan. Above the guideline threshold, the file needs residual income exceeding the requirement and it needs to be documented properly. That is underwriting work, not a denial. High-DTI VA loans explained

Denied Somewhere Else After Pre-Approval

A pre-approval that falls apart in underwriting usually means the first lender never verified what it approved. We would rather find the problem in week one than the week of closing. Why pre-approvals collapse

If a lender tells you the VA said no, ask them to show you where in the handbook. Most of the time they cannot — because it was their rule, not the VA’s.

Been turned down somewhere else?

Send us what happened. If the VA truly says no, we will tell you that straight and tell you what would change it. If it was a lender overlay, that is a different conversation entirely.

Down Payment

VA: $0 with full entitlement. Conventional: 3% minimum, 5% typical, 20% to avoid mortgage insurance.

Mortgage Insurance

VA: none, ever. Conventional: PMI required under 20% equity, removable later.

Credit Treatment

VA: no set minimum, manual underwriting available. Conventional: 620 floor in practice, no manual path.

Up-Front Cost

VA: one-time funding fee, financeable, waived if exempt. Conventional: no funding fee, but PMI runs monthly for years.

When Conventional Actually Wins

If you are putting 20% down and have strong credit, conventional can price better and skips the funding fee. We will run both and show you the real comparison rather than steering you to VA because it is the headline product.

Myth: VA loans are harder for sellers.

A VA buyer with a real pre-approval closes like anyone else. The appraisal has property standards attached, but those standards protect the buyer from a house with a failing roof — and repairs are negotiable.

Myth: You only get to use it once.

Entitlement can be restored and reused, and can sometimes support two loans at once. Veterans PCSing out of Texas posts do this regularly.

Myth: You need a 620 score.

That is a lender rule, not a VA rule. It is the single most common reason a Texas veteran believes they do not qualify when they do.

Myth: 100% disabled means you should pay cash.

With the funding fee waived, no monthly MI, and the homestead property tax exemption, the financed payment is often lower than people assume. Run it before you liquidate savings.

Is there a minimum credit score for a VA loan in Texas?

No. The VA sets no minimum credit score. Lenders add their own, usually 580 to 620. The JD.Mortgage Team does not add one. If automated underwriting refers your file, we evaluate a manual underwrite using compensating factors the VA recognizes — residual income, housing history, reserves, and documented explanations for past credit events.

Do 100% disabled veterans pay property tax in Texas?

No, not on their residence homestead. Texas Tax Code Section 11.131 exempts the total appraised value of the homestead for a veteran rated 100% disabled by the VA or granted individual unemployability. Given Texas property tax rates, this often changes affordability by hundreds of dollars a month. File with your county appraisal district.

What property tax exemption do partially disabled Texas veterans get?

A fixed dollar exemption under Tax Code Section 11.22: $5,000 at a 10 to 29% rating, $7,500 at 30 to 49%, $10,000 at 50 to 69%, and $12,000 at 70 to 100%. Veterans age 65 or older with at least a 10% rating also qualify for the $12,000 exemption, as do veterans who are totally blind or have lost use of a limb.

Is there a VA loan limit in Texas?

With full entitlement, no. There is no hard cap, and many buyers qualify for $0 down above the conforming baseline. With partial entitlement, the VA uses the 2026 conforming baseline of $832,750 in most Texas counties to calculate any minimum down payment. A small number of Texas counties are designated high-cost and use a higher figure.

Does the Texas Constitution restrict VA loans?

Not for purchases. Section 50(a)(6) of the Texas Constitution places strict limits on home equity borrowing — cash-out refinances and HELOCs — including an 80% cap and a 12-day notice period. A standard VA purchase is not a home equity loan and is not governed by those rules.

Can I get a VA loan in Texas after a foreclosure or bankruptcy?

Often yes. The VA generally looks for two years after a Chapter 7 discharge or foreclosure, and Chapter 13 can work while still in the plan with trustee approval and 12 months of on-time payments. Those are guidelines, not automatic denials — the file is built on what happened and what has changed since.

How much is the VA funding fee in Texas?

The same as everywhere — it is a federal fee, not a state one. For a purchase with less than 5% down: 2.15% first-time use, 3.3% subsequent use. With 5% or more down: 1.5%. With 10% or more down: 1.25%. A VA IRRRL is 0.5% flat. Veterans receiving VA disability compensation are exempt entirely.

Can I buy near Fort Hood or Fort Bliss before I arrive?

Yes. With orders in hand you can be pre-approved before you report and close shortly after arrival. Occupancy is generally certified within 60 days, and PCS timing has its own accommodations. The mistake most buyers make is starting the loan after they land instead of before.

Can I keep my Texas home as a rental and buy again with VA?

Often yes, if you have remaining entitlement. This is common when veterans PCS out of Killeen or El Paso and hold the first property. The second loan may require a down payment depending on how much entitlement is left and the county limit.

Does Texas having no state income tax help my VA approval?

It helps in a real way. VA underwriting weighs residual income — what is left after every obligation is paid. No state income tax means more take-home pay on the same salary, which strengthens residual income. It partially offsets Texas property tax rates, which push the other direction.

How long does a VA loan take to close in Texas?

A normal purchase timeline, typically 30 days, sometimes faster. VA appraisal scheduling is the most common variable. If something in your file will slow it down, you hear about it early rather than the week of closing.

Can a Texas seller pay more than 4% on a VA loan?

Yes, and this is the most misunderstood rule in VA lending. The 4% cap applies only to concessions. Separately, the seller can pay all of your normal allowable closing costs with no VA percentage cap at all. The two are stacked, not combined. On a $400,000 purchase a seller can cover your full closing cost package and still give roughly $16,000 in concessions on top.

Can a seller pay off my debt on a VA loan?

Yes. Paying off your credit cards, collections, judgments, or an auto loan is a permitted seller concession and counts toward the 4% allowance. It is the most powerful structuring tool in VA lending and almost nobody uses it. Eliminating a $450 monthly car payment can move a debt-to-income ratio from declined to approved without spending any of your own savings.

Can seller concessions pay to break my lease so I can buy sooner?

Yes. An early lease-termination penalty paid on your behalf is a seller concession and counts toward the 4% allowance. This is a routine structure, not an edge case — we have done it hundreds of times. It matters most for renters near a duty station who find the right home months before their lease ends. The break fee is commonly two months’ rent, and covering it through concessions means you stop waiting out a lease and buy when the right house is actually available. It needs to be written into the offer up front, which is why we run the structure before you make one.

What counts toward the VA 4% concession cap in Texas?

Seller payment of your VA funding fee, payoff of your debts including auto loans and credit cards, paying an early lease-termination penalty so you can buy sooner, prepaying your mortgage payments, temporary rate buydown escrows such as a 2-1 buydown, prepaid taxes and insurance beyond customary levels, and gifts of personal property. Normal closing costs and market-rate discount points do not count.

Is the VA 4% based on the purchase price or the appraised value?

It is calculated on the property’s VA reasonable value, established by the appraisal on the Notice of Value. In most transactions that figure tracks the purchase price closely, but when the appraisal comes in different from the contract price, the reasonable value is what governs the concession ceiling.

Can a seller prepay my mortgage payments on a VA loan?

Yes. A seller can prepay your actual mortgage payments — the full PITI, not just the tax and insurance escrows — and it counts toward the 4% concession allowance. Depending on the purchase price and payment, that can cover several months before you make your first payment out of pocket. It is one of the most effective concessions for a buyer who just paid to relocate, and sellers tend to agree to it readily because it costs them the same as an equivalent price reduction while doing considerably more for the buyer.

Ready to find out what you actually qualify for in Texas?

No minimum credit score. Manual underwriting when it makes sense. Straight answers either way.