Texas VA Home Loans and Texas Vet Loans: Interview with Shirley Mueller

Tim Lucas
Military VA Loan editor

MilitaryVALoan.com interviewed Shirley Mueller (NMLS #336103), Branch Manager and Sr. Loan Officer at PrimeLending (NMLS ID 13649). Shirley talks about VA home loans in Texas, The Texas Vet Loan Program, and her advice about finding a VA lender.

MVL: Can you give us a quick background on VA loans?  What are some key features?  Are they a good option for VA eligible buyers or are there better options available?

Shirley: VA Home Loans are guaranteed by the Department of Veterans Affairs, and many of the key features and benefits of VA Loans are a result of this guarantee.  For instance, eligible Veterans are able to obtain 100% financing without mortgage insurance, for a home purchase at rates comparable to what someone with perfect credit and a 20% down payment would receive.  Veteran borrowers do have to have acceptable credit, but the credit guidelines are more flexible than conventional loans and the veteran’s credit doesn’t have to be perfect.

Another benefit of the VA Mortgage is it follows the same FHA loan amount guidelines for high cost areas, meaning if the home you are buying or refinancing is in a designated high cost county, you can get the same VA financing up to the amount they have designated as the median home price for the county.  In some places, this is over a million dollars.

For most VA eligible buyers, it’s rare if utilizing the VA loan benefit is not the best option available.  Certain unique situations may exist where the borrower has a large down payment, the home or its location is unique, or a co-borrower is needed who doesn’t qualify under VA guidelines.  It’s always best to work with a loan originator who specializes in VA mortgages as they’ll be able to anticipate these scenarios before you are too far into the process.

MVL: Do VA loans in Texas differ from VA loans elsewhere in the nation?  What are the main differences and similarities?

Shirley: For the most part, getting a VA mortgage loan in Texas is the same as anywhere else in the country.  Texas does not have any designated high cost areas, so the maximum loan amount is $417,000 unless the Veteran borrower chooses to utilize the Jumbo VA loan option which requires a small down payment in in proportion to the amount over $417,000.

However, Texas Veterans who are purchasing a home also have the option to utilize the Texas Vet Loan Program sponsored by the Texas Veterans Land Board (VLB). The VLB sets the interest rates on a weekly basis, and they are incredibly low, usually lower than VA or Conventional Loan rates.

And for Veterans with a 30% or greater VA disability rating, the rate drops another 0.5% which starts getting close to the rates for ARM loans, but these are fixed rate loans.  And the great thing about a Texas Veteran Loan, is they are usually underwritten with the same guidelines as VA Loans, but can be underwritten with FHA or Conventional loan guidelines when appropriate for the specific borrower.

The last important thing to mention about Texas Vet Loans is (unfortunately) they can only be used for home purchases. It is not a program that can be utilized for refinancing an existing mortgage.

MVL: Are VA loan originators in Texas required to be specially licensed or certified?  Can any bank or mortgage company issue a Texas VA loan?

Shirley: There is not a special license required to originate a VA loan in Texas, just the same NMLS license requirements that apply to loan originators nationwide.  The loan originator must work for a lender or broker that is an approved VA lender, or if it’s a Texas Vet Loan approved by the Veteran Land Board.

However, just because there isn’t a special license or certification doesn’t mean Veteran borrowers should work with anyone at an approved lender.  I really do think it is advisable to work with and individual who specializes in the program and represents themselves as such.  Having knowledge of the VA requirements and guidelines, as well as the internal processes at VA for originating the loans will make the process of getting a VA loan faster and smoother.

MVL: You mentioned that the VA loan limit is $417,000 in Texas. What if a veteran wants to buy a home for more than this amount?

Shirley: If the home a Veteran wants to purchase is over $417,000 they could still do it using a high balance/VA Jumbo loan option. A down payment, usually 25% of the amount over $417,000, will be required.  Texas Veteran loan limits are the same: $417,000.

MVL: Are VA mortgage rates in Texas the same as VA loans in other states or do they differ?

Shirley: First of all, it’s important to understand that each lender sets their own VA loan rates, meaning the rates aren’t regulated by the Department of Veterans Affairs.

As far as VA mortgage rates in Texas, lenders set them the same way they would for any other state, based on the associated risk factors etc.  So that’s a long way of saying no, they aren’t really any different; except for the Texas Vet rates which are usually lower.

MVL: If somebody comes to you wanting to use a VA loan, what documents are they required to provide before their eligibility can be established, or their loan approved?

Shirley:  Well there is a difference between being eligible and being approved.  For the most part their VA Certificate of Eligibility will let us know if they are eligible and have the necessary entitlement. We can pull this through our lender interface with the VA’s automated system.

As far as being approved, that is a more involved process which includes reviewing the credit, income, liabilities, bank & asset statements, job history, rent or mortgage history as well as other potential items for each person’s specific situation.  As I said before, working with a VA Specialist can prove itself invaluable when going through the process.

MVL: Are there purchase restrictions on Texas VA loans?  Can a buyer use their eligibility to purchase land or an apartment complex?

Shirley: VA Loans used for buying a home in Texas or any other state, are intended for the borrowers personal residence only, so they cannot be used to purchase land or an apartment complex.  If the buyer/borrower intends to occupy one of the units, they can be used to buy a duplex – fourplex type of property, however, individual lenders may have requirements or restrictions that override VA guidelines for certain types of properties such as multi-family or mobile homes.

As far as land goes, the Texas Veterans Land Board does have a land purchase programs, the loans are originated directly by the VLB and interested veterans can find out more on their website.

MVL: Any final recommendations or suggestions you have for VA eligible buyers in Texas.

Shirley:  If you are a Veteran living in Texas and you are considering buying a home, the first and best thing you can do is get in touch with a lender that can help you 1) confirm your eligibility and 2) get pre-qualified for a VA Home Loan or a Texas Vet Loan so you know what price range of homes you should be looking at.  When you’ve already done the pre-qualification work it makes the process much smoother for your mortgage lender as well as your real estate agent, and they can work together to properly structure the contract to utilize your VA benefits.

Shirley Mueller (NMLS #336103) is a Branch Manager / Sr. Loan Officer with PrimeLending, a division of PlainsCapital Bank.  Specializing in VA Loans since 2003, she has originated well over 600 VA and Texas Veteran mortgage loans.  She takes pride in helping Veterans, and has worked with them in almost every scenario including while deployed overseas,  PCS-ing to a new base, separating and moving to a civilian job, and using income from military disability and retirement.