There are two excellent loan programs that that folks can get when they are planning on purchasing a home: the VA loan, and the Texas Vet Loan. Although they appear to be similar on the surface, they are used for different items and have different features, qualified expense requirements, and rules. Both types of accounts are offered through employers. Understanding the difference between these is paramount to making a smart financial decision whether you are buying, building, or refinancing a home in Texas.
So, what’s the difference between these two loans, and when is each the right choice for you?
What Is a VA Loan?
A VA Loan is a home loan available through a program established by the United States Department of Veterans Affairs. It was established in 1944 to help returning service members achieve homeownership without a down payment or private mortgage insurance (PMI).
Key Benefits of a VA Loan:
- 0% Down Payment – You can buy a home without making a down payment.
- No PMI Required – Saves you hundreds of dollars monthly.
- Competitive Interest Rates – Typically lower than conventional loans.
- Flexible Credit Requirements – Perfect for veterans with average credit.
- No Loan Limits – As of 2020, there’s no cap on how much you can borrow with full VA entitlement.
Want to see available options? Take a look at our inventory of VA Loan Homes for Sale.
What Is a Texas Vet Loan?
A Texas Vet Loan (formerly known as a Texas Veterans Land Board Loan) is a department of veterans affairs loan like VA Home Loans but with a few small differences. It is issued and managed by the Texas General Land Office and provides you with below-market interest rates while only being available in Texas.
The Texas Vet Loan program is exercised in combination with a VA Loan, FHA Loan, or conventional mortgage and is used only for the purchase of a primary residence.
Key Benefits of a Texas Vet Loan:
- Below-Market Interest Rates – Especially for disabled veterans.
- Available for Land, Homes, or Home Improvements, Offers more flexibility.
- Texas-Only Program – Exclusively for those who served and live in Texas.
To be eligible, you must be a Texas resident, had at least 90 days of active duty, and receive a (not dishonorable) discharge. Widows of deceased veterans may also qualify.
Texas Vet Loan vs. VA Loan: A Side-by-Side Comparison
| Feature | VA Loan | Texas Vet Loan |
| Offered By | U.S. Department of Veterans Affairs | Texas Veterans Land Board (VLB) |
| Available In | All 50 states | Only in Texas |
| Interest Rates | Competitive (market-based) | Lower than market, especially for disabled vets |
| Down Payment | None required | May require based on type of mortgage used |
| Can Be Combined With | Texas Vet Loan | VA Loan, FHA, or conventional loans |
Can I use a TX Vet Loan and a VA loan to purchase a home?
Yes! It is one of the perks of living in Texas as a veteran. And you can co-mingle the two loans for the most advantageous use of both.
Here’s how it works:
- You use the VA Loan to finance your home with 0% down and no PMI.
- The Texas Vet Loan program helps reduce your interest rate even further, especially if you’re a disabled veteran.
It’s the perfect cocktail for someone looking for long-term savings and even superior loan terms.
Which One Should You Choose?
Both programs come with amazing perks, but which loan you use comes down to a couple factors:
Choose a VA Loan if:
- You live outside Texas.
- You need more flexibility in property types or locations.
- You’re a first time home buyer va and want to maximize loan benefits.
Choose a Texas Vet Loan if:
- You’re a veteran living in Texas.
- You qualify for the Texas VLB and want a lower interest rate.
- You’re planning to buy land or make home improvements.
Many veterans opt to use both to maximize benefits when purchasing or building a home in Texas.
How Texas Vet Loan and VA Loan Affect Property Requirements
Note that any property purchased with a VA home loan must meet certain VA Minimum Property Requirements. These rules help ensure that the home is safe, structurally sound and clean.
In combination with a VA loan, if the home does not meet these requirements for Texas Vet Loans. However, if you purchase raw land using the Texas Vet Land Loan, its rules will be different.
Investment Properties and Eligibility
Another key distinction lies in usage. VA Loans are primarily for primary residences, although under certain circumstances, you may explore using a VA Loan for a Rental Property if you meet occupancy requirements first.
Texas Vet Loans Primary Residence Texas Vet Loans are for primary residences, but their land and home improvement loans are less restrictive.
Want to Build a Home Instead?
If you’d prefer to design and build something just like new, the VA Loan can also make that possible in the form of a VA Construction Loan. This enables a qualified veteran to purchase both the land and the home in one loan.
The Texas Vet Loan could also work in conjunction with a construction loan, providing additional financing options to veterans who prefer to start from scratch.
Final Thoughts
The Texas Vet loan and the VA loan are only two of many programs available to veterans and their families when they make the dream of owning a home a reality. Though there is some overlap, each has something different and special to offer.
If you are a Veteran looking to VA Loans in Texas, you are in luck because there are special loans that solely benefit Veterans and active members of the military. Don’t miss your opportunity to consider your goals, budget, and eligibility so you can select (or combine) the loan that’s right for you.