Veterans Housing Assistance Program (VHAP) was created in 1983 through the Veterans Land Board. For those that are eligible, it allows Veterans and Military Members to buy a new or existing home with a competitive, low-interest rate loan or no money down payment.
As the market changes, so do the interest rate and maximum amount a borrower can receive. You can find the current interest rate listed on the Veterans Land Board website. Veterans Housing Assistance Program interest rate is adjusted on the first business day of each week. Fixed-rate loans can be for 15, 20, 25, or 30-year terms. Veteran home buyers with a VA service-connected disability rating of 30% or greater qualify for an additional discounted interest rate.
Requirements for a home to qualify:
- The home must be the veteran or military member’s primary residence in Texas.
- The property must be a single-family attached or detached home, townhome or condominium.
- Multi-family units or duplexes must have been constructed at least five years prior to the closing date of the loan.
- New homes must have either ENERGY STAR certification or a HERS (Home Energy Rating System) Index score of 75 or less.
- The home must remain the Veteran or Military Member’s primary residence for at least 3 years, and the Veteran or Military Member borrower must occupy the home within 60 days after loan closing.
Requirements for an applicant to qualify:
- At least 18 years of age.
- A legal resident of Texas on the date of application.
- Meet one of the following service criteria:
- An active duty Military Member.
- A member of the Texas National Guard.
- A reserve component Military Member having completed 20 qualifying years for retirement.
- A Veteran having served at least 90 active duty days unless discharged sooner due to a service-connected disability and not discharged dishonorably.
- A surviving spouse of a Veteran listed as missing in action or whose death was service connected.
You may be wondering, “Does this only apply to VA Home Loans”? The answer would be NO! The Texas Land Board only subsidizes the rate, so it can be used with FHA, Conventional, or VA loan financing. (This is also referred to as a bond loan or interest rate buy-down.) There is a 1% participation fee and a maximum 1% origination fee for a total of 2% to use this program.
You may then be prompted to ask, “Why wouldn’t I just use a VA loan”? While a VA loan does not require a downpayment, veterans must have entitlement to be eligible. Also, the minimum FICO credit score for the Veterans Land Board Home Loan is 620. In this situation, a person with a 620 score will receive the same rate as a borrower with an 800 credit score. If you find yourself struggling with credit issues, we highly recommend our in-house affiliate credit repair company, Credit Enhancement Program. They can assist in reviewing your credit history and submitting disputes to help improve your credit scores.
It should also be noted that the Veteran Land Board does not offer to refinance. Even if you meet the above requirements for eligibility and already have a loan on your home, VLB cannot refinance to lower your current interest rate. The Veterans Housing Assistance Program also can not be used for a down payment on a home.
When taking out a loan through this program, the Veteran Land Board is listed as the first lien holder on a primary residence. Military members are capable of having one active loan in each program at the same time, land, home, and home improvement.
Once a Veteran, or his or her successor, has successfully paid off a VLB home loan, s/he may obtain another VLB home loan. The same applies to the VLB Land Loan Program. All VLB programs are self-funded, using no public taxpayer funding. VLB programs are financed with bonds, which are serviced by loan payments from Veteran and Military Member participants.
*All VLB interest rates and available discounts are subject to change at any time. The VLB base rate is subject to adjustment on the first business day of each week. All VLB loans are subject to credit approval.