A VA-backed purchase loan lets an eligible buyer finance a primary residence with no down payment and no mortgage insurance, as long as the sales price is not higher than the home’s appraised value. In return, three separate things have to clear: you have to qualify, the house has to qualify, and a one-time funding fee has to be paid or waived.
Most of the delays on VA purchases in Bell County are not credit problems. They are sequencing problems — a Certificate of Eligibility requested too late, an appraisal ordered before the contract terms were settled, or a repair item nobody expected. Below is what to line up, in the order it actually matters, plus two Texas programs worth checking alongside the federal benefit.
Reviewed September 21, 2026. The figures and rules below are drawn from the U.S. Department of Veterans Affairs, the Texas Comptroller and the Texas Veterans Land Board. Confirm current details with those sources before relying on them.
Step one: the Certificate of Eligibility
The VA calls the Certificate of Eligibility (COE) the first step in getting a VA-backed home loan. It confirms to a lender that you qualify for the benefit. You can request it online through VA.gov, ask your lender to pull it through the Web LGY system, or mail VA Form 26-1880 — though the VA notes the mail route takes longer.
What you need depends on how you served. Veterans supply a copy of their discharge or separation papers (DD214). Active-duty members need a statement of service signed by their commander. Guard and Reserve members who were activated provide a DD214 or documents showing activation dates. For members never activated, what the VA asks for depends on whether they are still serving or have been discharged, so check the requirement list for your own situation before you apply. Surviving spouses use VA Form 26-1817 if they receive Dependency and Indemnity Compensation, or Form 21P-534EZ along with marriage and death certificates.
A COE is not a loan approval. The VA is blunt about this: even with full entitlement, your lender still has to approve you for the loan based on credit, income, debts and assets. Get both — the COE and a real pre-approval — before you start writing offers. If you have not been through underwriting before, our guide to what you need before getting pre-approved covers the documents your lender will ask for.
What the benefit actually gets you
Two features do most of the work. The first is the option of no down payment, available as long as the sales price is not higher than the appraised value. The second is that VA loans carry no private mortgage insurance and no mortgage insurance premium — the monthly cost that conventional borrowers under 20 percent down and FHA borrowers both deal with. If you are weighing the alternatives, we compare the other two paths in FHA vs. conventional loans.
Then there is entitlement. Basic entitlement is $36,000 — which is not what you can borrow, but the maximum the VA will pay your lender if you default on a loan of $144,000 or less; above that the VA guarantees up to 25 percent of the loan amount. The VA’s guidance is that with full entitlement you do not have a loan limit, as long as you can afford the loan amount and the appraisal supports the purchase price. Entitlement gets more complicated if you already have a VA loan outstanding or had one that was never restored, and that is a conversation to have with your lender early rather than after you are under contract. Either way, the loan cannot exceed the lower of the appraised value or the purchase price.
The funding fee, and who does not pay it
The VA funding fee is a one-time charge on the loan, and it is the cost buyers most often leave out of their own math. These are the current purchase-loan rates published by the VA:
| Down payment | First use | After first use |
|---|---|---|
| Less than 5% | 2.15% | 3.3% |
| 5% or more | 1.5% | 1.5% |
| 10% or more | 1.25% | 1.25% |
Plenty of buyers pay nothing at all. According to the VA, you will not pay the funding fee if you are receiving VA compensation for a service-connected disability; if you are eligible to receive that compensation but are taking retirement or active-duty pay instead; if you are a surviving spouse receiving Dependency and Indemnity Compensation; if you received a proposed or memorandum rating before closing showing entitlement to compensation; or if you are on active duty and provide evidence of a Purple Heart by the closing date.
That exemption is worth real money, and it is worth confirming in writing early, because it changes the loan amount. Ask your lender to verify your exemption status against the COE before you set a budget, not after.
Who pays what at closing
On a VA purchase loan, the funding fee is the only charge you can roll into the loan. The VA’s guidance on funding fees and closing costs is that you must pay all other fees and charges when your loan closes. Origination fees, discount points, credit reports, the appraisal, insurance, taxes, title insurance and recording fees are all negotiable between buyer and seller — which is exactly the sort of thing to decide before the offer goes out.
Seller help is often misunderstood here. The VA allows sellers or builders to offer credits covering some or all of a buyer’s closing costs, and it does not cap those credits. What it caps are seller concessions — which the VA defines as anything of value added to the transaction at no additional cost to the buyer, such as paying your funding fee, paying off your debt or prepaying your hazard insurance. Concessions are limited to 4 percent of the home’s reasonable value.
Buyer-broker compensation changed in 2024 and the change is still in force. Under VA Circular 26-24-14, for purchase contracts executed on or after August 10, 2024, veterans using the VA home loan benefit can negotiate and may pay for their real estate professional’s buyer-broker charges, provided those charges are reasonable and customary in the local market. One practical consequence follows from the rule above: because the funding fee is the only charge that can be financed, a buyer-paid broker fee is cash you bring to closing. You can still ask the seller to cover it. Either way, settle who is paying your agent, and how much, in writing before you make an offer.
The house has to qualify too
This is the part that surprises first-time VA buyers. A VA-approved appraiser does not only estimate value — the appraiser also checks that the property meets basic condition standards the VA calls minimum property requirements. When the appraisal is finished you receive a Notice of Value.
An appraisal is not an inspection. The VA says so directly and recommends hiring a qualified home inspector to look for defects and maintenance issues. Those are two different reports bought for two different reasons, and skipping the inspection because an appraisal is already scheduled is an expensive habit. Our walkthrough of what happens during a home inspection explains what the second one buys you.
If the appraised value lands below the contract price, the VA’s home buying guidance lists several options: request a Reconsideration of Value, renegotiate the sales price with the seller, bring cash to the closing table to cover the gap, or use the escape clause below to withdraw. None of them is automatic, and which one is realistic depends on the contract you signed weeks earlier.
There is also a protection specific to this loan. The VA requires the purchase agreement to carry what it calls the escape clause: the buyer does not forfeit earnest money and is not obligated to complete the purchase if the contract price exceeds the reasonable value the VA establishes. The VA puts the duty on the lender — its buyer’s guide says the lender is responsible for ensuring the paragraph is in the sales contract before closing, and that without it the VA may not guaranty the loan. Your agent should still confirm it is in the paperwork before you sign, rather than after the Notice of Value arrives.
Two Texas programs worth checking
The first is the Texas Veterans Land Board home loan program, which is separate from the federal VA loan. The VLB states that Veterans with a VA service-connected disability rating of 30 percent or greater qualify for a discounted interest rate. The program requires the VLB to hold first lien position on a primary residence, and the VLB does not refinance. Because it takes first lien position, a VLB home loan is its own first mortgage rather than something you add to a VA-guaranteed one, so ask your lender to price both routes rather than assuming you can use each benefit at once. The VLB also requires the borrower to occupy the home within 60 days after closing and to keep it as a primary residence for at least three years. Current loan maximums and eligibility rules are published on the Texas General Land Office site.
The second is property tax. Texas gives disabled veterans a partial exemption under Tax Code Section 11.22, and the Comptroller publishes the amounts by rating: up to $5,000 off the property’s value at a 10 to 29 percent rating, up to $7,500 at 30 to 49 percent, up to $10,000 at 50 to 69 percent, and up to $12,000 at 70 to 100 percent. The veteran must have a service-connected disability classified by the VA or their branch of service, and must be a Texas resident. A $12,000 exemption is also available to a veteran who is 65 or older with a rating of at least 10 percent, who is totally blind in one or both eyes, or who has lost use of one or more limbs. Unlike the disabled person exemption, this one can be applied to any one property the veteran owns — it does not have to be a homestead. An unmarried surviving spouse, or surviving children under 18, may also qualify for a partial exemption.
Separately, Tax Code Section 11.131 provides a total exemption on a residence homestead for a veteran awarded 100 percent compensation from the VA due to a 100 percent disability rating or a determination of individual unemployability. An unmarried surviving spouse may keep it if the property was the surviving spouse’s residence homestead when the veteran died and remains so.
The filing details matter. The Comptroller’s disabled veteran exemption FAQ gives the deadline as April 30. Late Section 11.22 applications are accepted up to five years after the delinquency date for that year’s taxes; the window is shorter for some applicants, including surviving spouses, so check your own situation against the Comptroller’s guidance. The partial exemption uses Form 50-135; the 100 percent homestead exemption uses Form 50-114. In Bell County you file with the Tax Appraisal District of Bell County, which has offices in Belton (254) 939-5841, Temple (254) 771-1108 and Killeen (254) 634-9752.
Where the agent and the lender have to stay in step
Almost every item above sits on the seam between the two halves of the transaction. Entitlement and funding-fee exemption are lender questions that change what your agent can write. The escape clause and your termination rights are contract questions that change what your lender can salvage if the appraisal disappoints. Repairs flagged for minimum property requirements are both at once.
A short list worth working through before you write an offer: COE in hand, exemption status confirmed, pre-approval issued, buyer-broker compensation agreed in writing, escape clause verified in the contract, and an inspection booked independently of the appraisal. If you want the offer side covered too, we wrote about how to make a strong offer in Central Texas.
Once the paperwork side is settled, the useful next step is looking at real addresses rather than hypotheticals. A specific house lets your lender price taxes and insurance properly and lets your agent flag anything likely to trip a minimum property requirement. If Belton is on your list, you can scan current Belton home listings on our Temple Dream Homes site and bring two or three addresses back to the conversation.
Talk it through with both halves of the team
Twins Realty Team puts an agent and a mortgage expert on the same side of the table, which is the whole point when a loan has this many moving parts. If you are thinking about using your VA benefit in Temple, Belton, Killeen, Harker Heights, Salado or anywhere else in Bell County, call (254) 295-3582 or send us a message and we will walk through your entitlement, your timeline and your options together.
Written for Twins Realty Team, a real estate and mortgage team serving Bell County, Texas. We are paid when clients buy, sell or finance a home through us, so treat this as general information rather than personalized advice about your own loan, taxes or contract. Confirm current rules with the U.S. Department of Veterans Affairs, the Texas Veterans Land Board and the Texas Comptroller before you act on them.