Texas Veterans & Military · VA, VLB & Heroes · 2026 Guide

Texas Veteran & Military Home Loans & Down Payment Assistance

You served — Texas hasn’t forgotten. Between a VA loan with $0 down, the Texas Veterans Land Board, and Homes for Texas Heroes, there may be more help waiting than you realize — even if a lender once told you no. See what you qualify for.

By Tyler Allen Reviewed by Byron Davis, NMLS #621780 ~18 min read

You earned these benefits the hard way. The frustrating part is how many Texas veterans leave some of them on the table — usually because no one ever laid the options out in one place. Between federal and Texas programs, veterans and active-duty service members have more home-buying options than almost any other buyer in the state. The trick isn't qualifying. It's knowing what you've got.

You may be able to use a VA loan (zero down, no monthly mortgage insurance), down payment assistance through Homes for Texas Heroes, a Texas Veterans Land Board home loan, and a federal MCC tax credit. As a veteran, you're also exempt from the first-time-buyer rule, so having owned a home before doesn't shut any of these down. The right combination depends on your situation, and a licensed mortgage professional in our partner network helps you weigh them — not push a one-size package.

Below, we walk you through each option — the VA loan, the Homes for Texas Heroes veteran provision, the Texas Veterans Land Board (VLB), and the MCC — plus income limits, how the choices fit together, and what the path to closing looks like. Every number here traces back to TSAHC, the VA, the Texas General Land Office (which runs the VLB), the IRS, or HUD. We are not affiliated with the VA or any government agency. Confirm the current-year details with the issuing agency before you apply.

"I Think I Already Used Mine" — Maybe Not

The beliefs that cost veterans the most aren't about whether they qualify — they're about what they think they've already used up or missed. Here are the four that come up most.

• "I used my VA loan before, so it's gone." VA entitlement can often be restored or reused after a sale or payoff. Many veterans buy with it more than once — check your current entitlement at VA.gov.
• "Down payment help is first-time-buyers only." Not for you. Veterans are exempt from the first-time-buyer rule across TSAHC programs and on the MCC.
• "My disability rating complicates things." It often helps. At a 10%-or-greater service-connected rating, the VA funding fee is waived entirely.
• "It's the VA loan or nothing." Texas adds its own layer — the Veterans Land Board and Homes for Texas Heroes — that veterans in other states simply don't have.

If you've been assuming a door was already closed, it's worth a couple of minutes to see what's actually still open to you.

What Home-Buying Help Is Available to Texas Veterans?

Texas veterans and active-duty service members can draw on several distinct programs. The VA loan is a federal mortgage benefit earned through service. Homes for Texas Heroes, run by the Texas State Affordable Housing Corporation (TSAHC), names veterans and active military as an eligible hero profession and offers down payment assistance. The Texas Veterans Land Board (VLB), run by the Texas General Land Office, offers a separate veteran home-loan benefit. And the federal MCC tax credit is open to veterans without the usual first-time-buyer restriction. These are different programs with different rules — not a single product — and which one or two fit you best depends on your goals.

The VA Loan: Zero Down, No Monthly Mortgage Insurance

For most eligible veterans, the VA loan is the cornerstone benefit. It may allow 0% down on a primary residence, charges no monthly mortgage insurance, and often carries competitive rates. The VA funding fee (a one-time cost) may be financed into the loan, and it is waived entirely for veterans with a 10%-or-greater service-connected disability rating. Eligibility depends on your length and character of service; you will need a Certificate of Eligibility (COE). See VA.gov for current entitlement, funding-fee, and COE details — those rules are set by the VA and can change.

Homes for Texas Heroes for Veterans

TSAHC lists veterans and active military as an eligible profession under the Homes for Texas Heroes program. If you qualify, TSAHC pairs a fixed-rate first mortgage with down payment assistance worth up to about 5% of the loan amount, taken as a non-repayable grant or a 3-year forgivable second lien. Because a VA loan already allows zero down, veterans often use Heroes assistance toward closing costs instead. Veterans are also exempt from the first-time-buyer requirement across TSAHC programs.

One state program at a time. This article describes how a single TSAHC, TDHCA, or MCC program may apply to your purchase. ShopDPA does not market, package, or facilitate "DPA stacking" — combining multiple down-payment assistance programs into a layered structure on the same loan. Most Texas DPA programs have rules that prevent or restrict combining benefits, and "stacking" is not a realistic underwriting outcome for most buyers. The licensed mortgage professional in our partner network will help identify which single state program fits your situation best, then pair it with the appropriate first-mortgage product (Conventional, FHA, VA, USDA).

The Texas Veterans Land Board (VLB) Home Loan

Texas runs its own veteran home-loan benefit through the Veterans Land Board (VLB), administered by the Texas General Land Office. The VLB offers home loans (and land and home-improvement loans) to qualifying Texas veterans and military members, sometimes at competitive rates. The VLB is a separate program from the VA loan and from TSAHC, with its own eligibility and application. It is a Texas-specific benefit many veterans elsewhere do not have. Details and current rates live at the Texas General Land Office — see glo.texas.gov/vlb — and a participating lender can tell you whether the VLB or a standard VA loan fits your purchase better.

Active-Duty Service Members & BAH

Active-duty service members are eligible for the VA loan and are named alongside veterans in the TSAHC Heroes program. If you are stationed in Texas, your Basic Allowance for Housing (BAH) is generally countable income for qualifying, which can meaningfully increase the home price you can afford. PCS timing, intended occupancy, and entitlement restoration are worth discussing early with a lender, especially if you have used VA entitlement before.

Income Limits

The VA loan itself has no income limit, but TSAHC down payment assistance does. The Homes for Texas Heroes income limit runs from roughly $123,500 in most counties up to roughly $167,250 in the higher-cost Austin area, and it applies at any household size. So a veteran might use a no-income-limit VA loan on its own, or add Heroes assistance if within the income limit. The figure that controls a TSAHC file is the one published for your county in the program year you apply.

AMI source and freshness: County income limits are derived from HUD-published Area Median Income figures, verified periodically from huduser.gov. HUD refreshes AMI tables annually, typically in April, and the figures used by TSAHC, TDHCA, and federal programs may track HUD's release with a short lag. Program-specific income limits are sometimes set at 80%, 100%, or 115% of AMI depending on the program and whether the property sits in a HUD-targeted census tract. Always confirm the current applicable limit with your loan officer at application — the figure that matters is the one in force the day you submit your file.

The MCC Tax Credit — Veterans Are Exempt From the First-Time Rule

You may also qualify for the federal Mortgage Credit Certificate (MCC). An MCC turns part of the mortgage interest you pay each year into a dollar-for-dollar federal tax credit equal to 15% of your annual mortgage interest, every year for the life of the loan, as long as the home stays your primary residence. Crucially, veterans are exempt from the first-time-buyer requirement that normally applies to the MCC — so a veteran who has owned a home before may still be eligible.

The federal Mortgage Credit Certificate (MCC) is a tax credit — not a refund. In Texas the credit rate is 15% of the mortgage interest you actually paid that year, with no separate annual dollar cap (the federal $2,000 cap applies only when the credit rate exceeds 20%). The credit is non-refundable, so it can reduce your federal tax bill to zero but does not pay you cash back beyond that. If you owe little or no federal tax in a given year, your MCC benefit for that year may be smaller. We always recommend you verify your projected tax liability with a qualified tax professional before relying on MCC savings.

How the Options Fit Together

Most veterans anchor on one first mortgage — usually a VA loan, sometimes a VLB loan or a conventional/FHA loan — and then a lender weighs whether down payment assistance or an MCC adds value on top. These are choices, not a bundle. For comparison, here is how the main first-mortgage types pair with TSAHC assistance:

Credit Score & What Lenders Look At

The VA does not set a single minimum credit score, but lenders apply their own overlays, and TSAHC down payment assistance requires a minimum 620. A participating lender reviews your credit, debt-to-income ratio, COE/entitlement, and — for active duty — your BAH and orders. A licensed mortgage professional in our partner network can pull these together and tell you which option qualifies you for the most home.

Step-by-Step: How a Texas Veteran Buys a Home

You never submit anything directly to TSAHC, the VA, or the VLB through us. Our matching service connects you with a licensed mortgage professional in our partner network who handles the loan and any program enrollment together.

Documents You'll Need

Beyond the standard mortgage paperwork (pay stubs, W-2s or LES, bank statements, ID), a veteran should be ready with a Certificate of Eligibility (COE) for the VA loan, your DD-214 (or current orders for active duty), and — if you carry a service-connected disability rating relevant to the funding-fee waiver — your VA award letter. Your lender can help request the COE if you do not have it yet.

Recapture Tax — What to Know Before You Sign

Federal §143 recapture tax — three conditions, all must hit. A federal recapture tax may apply (on TSAHC/MCC programs, not on a stand-alone VA loan) if and only if all three of the following happen at the time you sell or refinance away from the financed property:

1. You sell or refinance within nine years of closing on the home.
2. Your household income at the time of sale exceeds the IRS recapture-adjusted income limit for that program year.
3. You realize a gain on the sale that exceeds the recapture threshold.

If any one of those conditions is NOT met, no recapture tax is owed. In practice, very few homeowners trigger recapture. TSAHC also offers a Recapture Tax Reimbursement program that may refund the recapture amount if you do hit all three — eligibility and procedure live at tsahc.org. We always recommend you verify your specific situation with a tax professional and confirm program-current details with the issuing agency before assuming recapture will or will not apply.

Texas Veteran Home Loan FAQ

Can a Texas veteran get down payment assistance and a VA loan?

You may qualify for both a VA loan and Homes for Texas Heroes down payment assistance, with veterans exempt from the first-time-buyer rule. Because the VA loan already allows zero down, veterans often use the assistance toward closing costs. A lender confirms the best single combination for your file.

What is the Texas Veterans Land Board (VLB) loan?

The VLB, run by the Texas General Land Office, is a Texas-specific home-loan benefit for qualifying veterans and service members, separate from the federal VA loan and from TSAHC. See glo.texas.gov/vlb for current rates and eligibility; a lender can tell you whether the VLB or a standard VA loan fits your purchase better.

Is the VA funding fee waived for disabled veterans?

The VA funding fee is generally waived for veterans with a 10%-or-greater service-connected disability rating. Rules are set by the VA and can change — confirm your status and the current fee schedule at VA.gov.

Do veterans have to be first-time buyers?

No. Veterans are exempt from the first-time-buyer requirement across TSAHC programs — including the MCC tax credit, which normally is first-time-buyer only. A veteran who has owned a home before may still qualify.

Can active-duty service members use these programs?

Yes. Active-duty military are eligible for the VA loan and are named alongside veterans in the TSAHC Heroes program. If stationed in Texas, your BAH is generally countable income for qualifying.

How much down payment assistance can a veteran get?

TSAHC assistance may be worth up to about 5% of the loan amount, as a non-repayable grant or a 3-year forgivable second lien. With a zero-down VA loan, veterans often direct it toward closing costs. A participating lender confirms the figure for your file.

How much does the MCC tax credit save a veteran?

The MCC is a federal tax credit equal to 15% of the mortgage interest you pay each year, with no separate annual dollar cap in Texas. It is non-refundable, so your benefit in any year is limited by your federal tax liability. Verify your projected liability with a tax professional.

Is ShopDPA affiliated with the VA?

No. ShopDPA is a Texas home loan referral service and is not affiliated with the VA, the Texas General Land Office, TSAHC, or any government agency. We connect you with a licensed mortgage professional in our partner network who handles VA loans and the state programs.

Will I owe a recapture tax later?

Recapture applies to TSAHC/MCC programs (not a stand-alone VA loan), and only if all three federal §143 conditions hit at once: you sell or refinance within nine years, your income exceeds the recapture-adjusted limit, and you realize a gain above the threshold. Very few homeowners trigger it. Confirm with a tax professional.

Does ShopDPA process the loan for me?

No. We do not originate, fund, or service loans. Our matching service connects you with a licensed mortgage professional in our partner network who handles the VA loan and any TSAHC or VLB enrollment together.