Texas Veterans Land Board Mortgage – Complete Guide

Texas Veterans Land Board Home Loan Benefits

The Texas Veterans Land Board (VLB) offers a state-funded interest rate subsidy that stacks on top of the federal VA home loan guarantee, providing eligible Texas veterans with below-market interest rates approximately 0.25–0.50% lower than standard VA loan rates . Veterans with a 30% or higher service-connected disability receive an additional rate reduction . The VLB Home Loan can be used with zero down payment (when combined with VA eligibility) to purchase single-family homes, condominiums, townhomes, and manufactured homes throughout Texas .

Quick Facts

What Is the Texas Veterans Land Board Home Loan Program?

The Only State-Run Home Loan Program of Its Kind

The Veterans Housing Assistance Program (VHAP) was created by the Texas Legislature in 1983 to assist Texas veterans and military members in purchasing a home . It is administered by the Texas Veterans Land Board, which is part of the Texas General Land Office.

What makes this program unique: The VLB is the only state agency in the nation that provides this type of comprehensive home loan benefit to veterans . It is not a replacement for the federal VA loan—it’s an additional state benefit that is layered on top of the federal VA guarantee to create the lowest effective mortgage rate available in Texas .

The Core Benefit: Below-Market Interest Rate

The VLB issues state bonds and uses the proceeds to fund below-market mortgage loans through participating lenders . The interest rate on VLB-funded loans reflects the state’s bond cost rather than commercial mortgage market rates, typically producing rates 0.25–0.50% below standard VA loan rates .

Real-dollar impact on a $400,000 home:

• Monthly savings at 0.375% below market: ~$85

• Annual savings: ~$1,020

• 10-year savings: ~$10,200

• 30-year savings: ~$30,600

The savings compound into tens of thousands of dollars over the life of the loan .

Additional Rate Reduction for Disabled Veterans

Texas veterans with a VA service-connected disability rating of 30% or higher qualify for an additional rate reduction beyond the standard VLB subsidy .

Combined benefit for a 50% disabled veteran:

• Federal VA guarantee: zero down payment, no PMI, no funding fee

• Standard VLB rate subsidy: ~0.25–0.50% below market

• Disability rate reduction: additional ~0.125–0.25% below the VLB rate

• Total: ~0.50–0.75% below standard VA market rates 

This produces the maximum financial advantage available to any Texas homebuyer in any loan program .

Texas VLB Home Loan Eligibility

Who Qualifies

To be eligible for a VLB home loan, you must meet both federal VA eligibility AND Texas residency requirements .

You must:

• Be a bona fide and legal resident of Texas at the time of application 

• Meet one of the following service criteria :

  • Served on active duty in the U.S. Armed Forces with an honorable or general discharge

  • Served in the Texas National Guard or Texas State Guard with an honorable discharge

  • Currently on active duty and purchasing a Texas property

  • Be the surviving spouse of an eligible Texas veteran who died in the line of duty or from a service-connected cause

The Texas Residency Requirement Explained

Common misconception: Many veterans believe they must have been a Texas resident at the time they enlisted. This is not true for veterans who now live in Texas.

What the rule actually says:

• If you are currently a Texas resident and served on active duty, you qualify—regardless of where you enlisted 

• If you enlisted from Texas and moved away, then returned to Texas, you qualify 

• If you are currently on active duty and purchasing a Texas property, you qualify 

The only exception: Veterans who enlisted from Texas and served in the Texas National Guard or Texas State Guard must meet specific service requirements .

If you’re unsure: Contact VLB directly at vlbinfo@glo.texas.gov or call 1.800.252.VETS (8387) to confirm your eligibility .

Dual-Spouse Eligibility

If both spouses are individually eligible veterans and they jointly purchase the same home, they can apply together . The total loan amount cannot exceed the maximum VA mortgage limit .

Multiple Loan Usage

Veterans can use the VLB home loan more than once, provided that all previous VLB home loans have been repaid in full . Only one home may be financed at any given time, but a veteran can obtain both a purchase loan and a home improvement loan simultaneously .

Loan Terms and Limits

Current Loan Limits

The VLB home loan limit was increased from $766,550 to **$806,500** in January 2026 . This increase provides veterans with greater purchasing power in Texas’s competitive housing market.

Loan Terms

VLB home loans are available in the following fixed-rate terms:

• 15-year

• 20-year

• 25-year

• 30-year 

Down Payment Requirements

When combined with the federal VA home loan guarantee, VLB home loans require zero down payment . Veterans using VA-backed homebuying benefits along with VLB’s program can also avoid private mortgage insurance (PMI) .

No Income Limits

The VLB home loan program has no income limits, making it accessible to veterans at all income levels . This is a significant advantage over many other state and federal affordable housing programs.

Property Requirements

Types of Properties Eligible

The VLB home loan can be used to purchase:

• Single-family detached homes

• Single-family attached homes

• Townhomes

• Condominiums

• HUD-code manufactured homes 

Not eligible:

• Mobile homes (as defined by Texas Civil Statutes) 

• Refinancing of existing mortgages 

Occupancy Requirement

The home must be occupied by the veteran within 60 days of closing and must be maintained as the veteran’s principal residence for three consecutive years from the date of purchase .

Consequences of violating the occupancy requirement: The VLB may increase the interest rate on the loan to a higher rate, accelerate all principal and interest, or adopt other remedies .

Property Condition Standards

The home must meet all requirements established by the participating lending institution . Manufactured homes must meet FNMA or FHLMC guidelines .

How to Apply for a Texas VLB Home Loan

Step-by-Step Application Process

Step 1: Confirm Your Eligibility

• Verify you meet both VA and VLB eligibility requirements

• Obtain your Certificate of Eligibility (COE) from the VA

• COE can be requested by your lender through VA’s ACE system or via VA Form 26-1880 

Step 2: Find a VLB Participating Lender

• VLB does not originate loans directly—you must apply through a participating lender 

• The lender handles the full application process and coordinates with VLB

• Ask lenders: “Are you a VLB participating lender for the Texas Vet rate benefit?” 

Step 3: Submit Your Application

• Complete the loan application through your participating lender

• Provide required documentation:

  • DD-214 (Member Copy 4 preferred) 

  • Proof of Texas residency

  • Income documentation

  • VA Certificate of Eligibility

  • VA disability rating letter (if applicable)

Step 4: Underwriting and Approval

• The lender underwrites the loan

• VLB provides the rate subsidy through bond funding

• VLB certification application may be required 

Step 5: Closing

• Close at a title company or attorney’s office 

• One application, one closing, two overlapping benefit structures 

Required Documentation

Additional VLB Programs for Veterans

Veterans Land Loan Program

The VLB Veterans Land Loan Program is the only one of its kind in the nation, allowing Texas veterans and military members to borrow money to purchase land at competitive interest rates .

2026 updates:

• Standard land loan increased from $150,000 to **$200,000** (effective February 9, 2026) 

• Dual-spouse land loan increased from $225,000 to **$275,000** 

• Minimum 5% down payment required 

• Tracts of one acre or more eligible 

Texas Veterans Home Improvement Program (VHIP)

Introduced in 1986, VHIP provides below-market interest rate loans for home repairs and improvements to existing homes .

Eligibility:

• Texas veterans who own and occupy their home

• Home must be the veteran’s primary residence

• Loan can be used for repairs, improvements, and modifications

Application requirements:

• Credit application (HUD Form 56001) 

• $135 fee for flood zone certification and title search 

• Copy of DD-214 and driver’s license 

• Most recent mortgage statement 

Comparing VLB Home Loan vs. Standard VA Loan

Common Questions

What is the Texas Veterans Land Board home loan benefit?

The VLB home loan is a Texas state benefit that provides eligible veterans with below-market interest rates on home loans. The state issues bonds to fund the loans, allowing rates to be 0.25–0.50% below standard VA loan rates. The program stacks on top of the federal VA loan guarantee, providing the lowest effective mortgage rate available in Texas.

Who qualifies for a Texas VLB home loan?

Veterans who are Texas residents and meet federal VA eligibility requirements qualify. This includes active duty veterans, National Guard and Reserve members, and surviving spouses of eligible Texas veterans. You do not need to have been a Texas resident at the time of enlistment—only current Texas residency matters.

Do I need a VA loan to use the VLB home loan program?

You need federal VA eligibility to access the VLB rate subsidy. The VLB benefit stacks on top of the federal VA guarantee. Veterans who are not VA-eligible cannot use this program. However, many Texas veterans are VA-eligible even if they have not previously used a VA loan.

What is the interest rate for a Texas VLB home loan?

VLB rates are typically 0.25–0.50% below standard VA market rates. Rates change periodically as new bond issuances occur. Veterans with a 30% or higher service-connected disability receive an additional reduction. Current rates are published at vlb.texas.gov.

Can I use the VLB home loan with zero down payment?

Yes. When combined with the federal VA home loan guarantee, the VLB home loan requires zero down payment and no private mortgage insurance. This is one of the most significant benefits of the program.

What is the loan limit for a Texas VLB home loan?

The VLB home loan limit is $806,500 as of January 2026. This increase from the previous limit of $766,550 provides veterans with greater purchasing power in Texas’s competitive housing market.

Can I use the VLB home loan more than once?

Yes. Veterans can obtain more than one VLB home loan, provided that all previous VLB home loans have been repaid in full. Only one home may be financed at any time, but a veteran can have both a purchase loan and a home improvement loan simultaneously.

What types of properties can I buy with the VLB home loan?

You can purchase single-family attached or detached homes, townhomes, condominiums, and HUD-code manufactured homes. The home must be located in Texas and used as your principal residence. Mobile homes and refinance transactions are not eligible.

How do I apply for a Texas VLB home loan?

You must apply through a VLB participating lender. VLB does not originate loans directly. Your lender handles the full application process, including coordinating with VLB for the rate subsidy. Visit vlb.texas.gov to find a participating lender.

What happens if I don’t occupy the home for three years?

The VLB requires homeowners to occupy the property as their principal residence for three consecutive years from the date of purchase. Failure to meet this requirement may result in the VLB increasing the interest rate, accelerating all principal and interest, or taking other remedial actions.

Key Takeaways

• The Texas VLB home loan provides a below-market interest rate approximately 0.25–0.50% lower than standard VA loan rates 

• Veterans with a 30% or higher service-connected disability receive an additional rate reduction 

• Eligibility requires Texas residency and federal VA eligibility—not necessarily enlistment from Texas 

• Zero down payment is available when combined with federal VA eligibility 

• The loan limit increased to $806,500 in January 2026 

• No income limits make the program accessible to veterans at all income levels 

• The home must be occupied within 60 days and maintained as principal residence for three years 

• VLB does not originate loans—you must apply through a participating lender 

• The VLB also offers land loans (increased to $200,000) and home improvement loans 

• This is the only state-run program of its kind in the United States 

Official Resources

• Texas Veterans Land Board – glo.texas.gov/vlb

• VLB Home Loan Rates – s3.glo.texas.gov/vlb/loans/home-loans

• VLB Forms – vlb.texas.gov/forms

• VLB FAQ – vlb.texas.gov/about/faq

• VA.gov – U.S. Department of Veterans Affairs

• VA Certificate of Eligibility – va.gov/housing-assistance/home-loans

• VLB Contact: vlbinfo@glo.texas.gov | 1.800.252.VETS (8387) | 512.463.5060