What The VA Actually Does
The VA does not lend money. It guarantees part of a loan made by a private lender, and that guarantee is what makes no down payment and no monthly mortgage insurance possible.
VA And Buyer Financing Education
VA Loans And Home Financing For San Antonio Buyers
How VA eligibility, entitlement, the funding fee, occupancy, the VA appraisal, seller concessions, and assumability actually work in a Texas purchase. Velvet Realty Group is a real estate brokerage, not a lender, and does not quote interest rates or APR.
Entitlement Is Reusable
Entitlement restores when a prior VA loan is paid off, and second-tier entitlement can support two VA loans at the same time.
The Appraisal Is Different
A VA appraisal reviews value and Minimum Property Requirements. A home can pass a general inspection and still need repairs before the appraisal will clear.
Where To Get Numbers
Rates, APR, payment, and approval come from a licensed loan originator reviewing your actual file. Nothing on this page is a loan approval or a quote.
Start Here
What a real estate agent can and cannot tell you about your loan.
This page exists because VA buyers around Joint Base San Antonio get handed slogans instead of mechanics. Everything below is program structure: what the rule is, what it does to your contract, and what has to be confirmed with a lender before you rely on it.
What we can explain
How the VA program is built, what the guarantee covers, how entitlement is consumed and restored, what the appraisal reviews, what concessions the program permits, and how each of those interacts with the dates in a Texas contract.
What we cannot do
Approve you, price your loan, quote an interest rate or APR, tell you what your payment will be, or determine your entitlement. Those require a licensed loan originator with your documents in front of them.
Why the distinction matters to you
An agent who guesses at loan terms is guessing with your earnest money. The useful version of agent help is knowing which questions to put to your lender early enough that the answer still changes your strategy.
How to use this page
Read the section that matches where you are. Then take the specific questions at the end of each section to your loan originator and get the answers in writing before the option period starts running.
Eligibility
VA eligibility and how the Certificate of Eligibility works.
Eligibility comes from service, not from income or credit. The Certificate of Eligibility, usually called the COE, is the document that proves it and tells the lender how much entitlement you have available.
Who is generally eligible
Service members on active duty, veterans, and members of the National Guard and Reserve who meet the applicable service requirements. Certain surviving spouses are also eligible. Minimum service periods differ by era and by component, which is exactly why the COE exists rather than a rule of thumb.
How the COE is obtained
Lenders can request a COE electronically through the VA's system, and when the automated check verifies service the certificate comes back without a manual step. When the automated system cannot verify service, the file moves to a manual request, which takes longer and needs supporting documents. Ask your originator which path your file took rather than assuming a turnaround.
What documents back it up
A discharged veteran generally needs a DD-214. A service member on active duty generally needs a current statement of service signed by the appropriate authority. A surviving spouse applies using VA Form 26-1817 or the appropriate VA form for the circumstances.
What the COE tells the lender
It confirms eligibility, shows whether the funding fee applies or an exemption is on file, and shows entitlement already in use from a prior VA loan. That last line is the one that decides how much you can borrow with no down payment.
The timing mistake to avoid
Get the COE handled during preapproval, not after you are under contract. A file that is otherwise clean can sit for days waiting on a manual COE request, and those days come out of your contract calendar, not the lender's.
Eligibility is not approval
A COE says the VA will guarantee a loan for you. It does not say a lender will make one. Income, employment, credit, debt, assets, and the property still have to satisfy the lender's underwriting.
Ask your lender: is my COE in hand, does it show any entitlement in use, and does it show a funding fee exemption? Eligibility rules are published by the VA at va.gov.
Entitlement
Entitlement, and the second-tier entitlement that keeps a JBSA house.
Entitlement is the amount of the loan the VA will guarantee on your behalf. It is the least understood part of the program and the part that most often changes what a buyer can do on a second purchase.
Full entitlement
A buyer with full entitlement and no prior VA loan outstanding generally has no VA-imposed loan limit on a no-down-payment purchase. The constraint becomes what the lender will approve and what the property appraises for, not a published county cap.
Partial or remaining entitlement
Once a VA loan is outstanding, part of your entitlement is tied to it. With only partial entitlement remaining, the applicable county loan limit re-enters the calculation and your lender computes the maximum you can finance with no down payment. Above that figure, a down payment is generally required.
Second-tier entitlement in practice
This is the mechanic that lets a buyer keep a San Antonio home as a rental after orders move them, and still use VA financing at the next duty station. It works when enough entitlement remains for the new loan amount at the new location. It is not automatic and it is not a workaround.
Restoration
Entitlement is generally restored when the prior VA loan is paid in full, most commonly when you sell. There is also a one-time restoration available in defined circumstances where the loan is paid off but the property is retained. Both require a request and documentation.
Where a seller gets hurt
If you sell by letting a buyer assume your VA loan and the buyer does not substitute their own entitlement, yours can stay tied to that loan until it is paid off. Sellers regularly discover this after closing. The mechanics are on the assumable VA loans page.
What to ask before you plan around it
Ask your lender to calculate remaining entitlement and the resulting maximum no-down-payment loan amount for the specific county you are buying in, before you set a price range. Getting this wrong late is expensive.
Related reading on this site: PCS relocation planning, Randolph AFB housing, and Fort Sam Houston housing.
Funding Fee
The VA funding fee, and who is exempt from paying it.
The funding fee is a one-time charge that keeps the program running without monthly mortgage insurance. It can usually be financed into the loan rather than paid in cash, which is why many buyers never see it as an out-of-pocket item.
What drives the amount
The VA publishes a fee schedule that varies with the type of transaction, whether this is a first or subsequent use of the benefit, and how much of a down payment is made. A down payment reduces the fee. Your lender applies the current published schedule to your file.
Who is exempt
The VA publishes exemptions that include veterans receiving compensation for a service-connected disability, veterans who would be entitled to receive that compensation but for retirement or active duty pay, certain surviving spouses, and Purple Heart recipients serving on active duty.
How an exemption gets applied
The exemption has to appear in the file, normally through the COE or supporting VA documentation. A buyer whose rating is pending can be charged the fee at closing and refunded later once the rating is effective. Tell your lender early if a claim is in process.
Financing it changes the loan amount
A financed funding fee is added to the loan, so it raises the balance and the payment slightly. It does not come out of the appraised value calculation the way a down payment does. Ask for the loan estimate with and without financing it.
Assumptions are their own line
The VA lists loan assumptions separately in its funding fee chart, currently at a lower rate than a standard purchase, subject to the same exemption rules and to verification for the actual transaction.
What it is not
It is not mortgage insurance, it is not monthly, and it is not a lender charge. It also is not the only cost at closing. Ask your lender for total cash to close, which includes closing costs, prepaid taxes and insurance, and your escrow deposit.
Current fee amounts and the full exemption list are published by the VA at va.gov. Confirm your own figure with your lender. Velvet Realty Group does not quote fees, rates, or APR.
Occupancy
Occupancy requirements, and how the VA handles orders.
The VA home loan benefit is for a home you intend to occupy as your primary residence. You certify that intent, and the certification is a real underwriting condition, not a formality.
The general standard
The expectation is that you occupy the home within a reasonable time after closing. The VA generally treats sixty days as reasonable, and allows a longer period in defined circumstances where the buyer can certify a specific later date.
When a service member cannot move in
The program was written for people whose reporting dates and deployments do not line up with closing dates. Spouse occupancy can satisfy the requirement for a service member on active duty, and there are documented accommodations for deployment. Bring the actual dates to your lender rather than guessing.
Buying before you arrive
Buying ahead of a report date is common around JBSA and is workable, but the occupancy certification has to match the plan you actually intend to follow. Your lender documents it.
Keeping the home after orders
Occupancy is judged at the time of the loan. Later orders that move you out do not retroactively break the loan, which is why the second-tier entitlement path exists. Do not, however, buy a home you never intend to occupy and describe it as a primary residence.
What VA financing will not do
It is not for a pure investment purchase or a second home. Multi-unit property up to four units is possible when you occupy one of them and meet the additional requirements the lender applies.
The practical version
Tell your lender your report date, your current duty location, your household plan, and your intended move-in date before you write an offer. Occupancy problems surface late in underwriting, which is the worst possible time.
Appraisal And Property Condition
The VA appraisal and Minimum Property Requirements.
This is where VA contracts most often go sideways in San Antonio, and it is the part of the program that a buyer has the most ability to plan around before writing an offer.
Two jobs, one report
A VA appraisal establishes reasonable value and reviews the property against Minimum Property Requirements. The resulting document is the Notice of Value. Conditions listed on it must be resolved before the loan can close.
Not a home inspection
An appraisal is for the lender and is required. A home inspection is for you and is optional, and it covers far more. Buyers who skip the inspection because the appraisal is coming have confused the two documents.
What MPRs generally cover
Safe and sanitary living conditions, working mechanical and electrical systems, a permanently installed heat source, a roof that keeps water out, adequate and legal access to the property, sound structure, and no readily observable hazards. Well and septic properties carry additional requirements.
The VA escape clause
Federal regulation requires an amendatory clause on VA purchases giving the buyer the right to terminate without penalty and recover the earnest money if the price exceeds the reasonable value established by the VA. It cannot be waived. A buyer may still choose to proceed and pay the difference in cash.
Tidewater and reconsideration of value
When an appraiser expects to come in below the contract price, the Tidewater process gives the parties a short window to submit additional comparable sales before the value is finalized. There is also a formal reconsideration process afterward. Both are agent work, and both have deadlines.
The timing problem
The appraisal is usually ordered after the option fee is delivered, and it often does not come back before a standard Texas option period expires. Planning for that gap is the single highest-value thing an agent does on a VA file. We walk through it on the VA appraisal and MPR page.
Negotiation
Seller concessions on a VA loan, and the distinction agents get wrong.
The VA is unusually generous here, and most of the confusion comes from mixing two different things: a seller paying your closing costs, and a seller concession as the VA defines it.
Closing costs paid by the seller
A seller paying the buyer's allowable closing costs and prepaid items is a normal negotiated term. The VA does not count that as a concession under its concession rule, and there is no VA-imposed cap on it. Lender and investor limits still apply.
What the VA calls a concession
A concession is something of value given to the buyer beyond normal closing costs: payment of the funding fee, payment of the buyer's judgments or debts, a temporary buydown, gifted personal property, or escrowed payments on behalf of the buyer. The VA caps concessions in that sense at four percent of the established reasonable value.
Why this matters at the table
A buyer who thinks the four percent figure applies to seller-paid closing costs will ask for far less than the deal could carry. Knowing which bucket each item falls into is worth real money on a VA purchase.
Non-allowable charges
The VA limits certain fees a veteran buyer may be charged. Those fees do not disappear; they are covered by a lender credit or by the seller. Your loan originator identifies them on your specific file. This is a common source of last-minute closing statement surprises.
Concessions versus price
In a market with negotiating room, a concession is frequently worth more to a buyer than the same dollars taken off the price, because it reduces cash needed now rather than trimming a payment slightly. Run both versions before choosing.
The seller only sees net
Sellers evaluate what they walk away with. An offer that asks for concessions and shows the seller a net figure competes better than one that leaves them to do the arithmetic. That is an agent job, not a lender job.
Concession and closing cost rules are published by the VA at va.gov. Which specific charges are allowable on your file is a lender determination.
Assumability
VA loans are assumable, and that cuts both ways.
Assumability is a genuine feature of VA-guaranteed loans and it is rare among common loan programs. It creates an option for a buyer and a risk for a seller, and the two are the same transaction.
What assumption means
An approved buyer takes over the existing loan, including its remaining balance and terms, rather than originating a new one. The buyer must qualify and the servicer must process and approve the assumption.
The cash gap decides most deals
The buyer assumes the remaining balance, not the price. The difference between the two has to be solved with cash, an approved second lien, or a negotiated price. That gap kills more assumption deals than any other factor.
Release of liability
Without a documented release, a selling veteran can remain personally liable on a loan secured by a home someone else now owns. This is not automatic and it is not implied by the closing.
Entitlement substitution
If the assuming buyer is a veteran who substitutes their own entitlement, the seller's entitlement can be freed. If not, the seller's entitlement generally stays attached to the loan until it is paid off.
Timeline
Assumption processing runs through the loan servicer, and servicer timelines are frequently longer than a normal purchase closing. Contract dates have to be written for the real process, not the hoped-for one.
Finding one
Assumable listings are not reliably flagged in the MLS, so finding them is a search technique rather than a filter. We cover the search and verification steps on the assumable VA listings page, and the full mechanics on the assumable VA loans page.
Stacking
Using the Hero Rebate alongside VA financing.
These are two separate things that meet on the same closing statement. The VA benefit is a loan program. The Hero Rebate is a brokerage-side rebate of a portion of Velvet Realty Group's real estate compensation to an eligible buyer. Neither one changes the other's rules.
Why they can be combined
Texas Real Estate Commission guidance permits a license holder to rebate a portion of the license holder's commission to a party in the transaction. Nothing in the VA program prohibits a buyer from receiving a rebate from their own agent. The two live in different places on the settlement statement.
The lender still has to agree
A rebate has to be disclosed and reflected correctly on the Closing Disclosure, and the lender decides how it is treated in the cash-to-close calculation. Some lenders apply it as a credit against the buyer's costs. Confirm the treatment with your loan originator before you plan around it.
What has to line up
Your buyer representation agreement, the amount of compensation actually available in the transaction, broker approval, title company instructions, lender treatment, and the final settlement figures. Any one of them can change the outcome.
Sequence it early
The rebate conversation belongs in the consultation, before the search gets urgent. It is a planning item that affects your cash-to-close picture, not a discount you negotiate at the closing table.
What it is not
It is not a rate concession, not a lender credit, not guaranteed cash, and not a substitute for preapproval or reserves. Treat it as one line in a full cost review.
Tax and reporting
Rebate treatment for tax purposes depends on how it is structured and on your circumstances. That is a question for your tax professional, not for your agent or your lender.
Rebate availability, buyer compensation, lender treatment, and final settlement rules can change by transaction. Verify your buyer agreement, lender guidance, broker approval, and Closing Disclosure before counting on any rebate.
Program Comparison
How the three common programs differ on the things that decide a deal.
This compares structure, not pricing. Ask a lender to price your specific file and put the terms in writing.
| Factor | VA | FHA | Conventional |
|---|---|---|---|
| Who it is for | Eligible service members, veterans, and some surviving spouses | Open to any qualified buyer, often used for lower credit profiles | Open to any qualified buyer |
| Minimum down payment | None with full entitlement | 3.5% at the program's standard credit threshold | Commonly 3% to 5% for a primary residence |
| Monthly mortgage insurance | None | MIP, often for the life of the loan | PMI until the loan-to-value threshold is reached |
| Up-front fee | VA funding fee, financeable, exemptions apply | Up-front MIP, financeable | None |
| Property condition standard | VA Minimum Property Requirements, enforced at appraisal | HUD minimum property standards | Lender and appraiser judgment, generally the most flexible |
| Seller-paid closing costs | Permitted, no VA-imposed cap; separate 4% concession rule | Capped by program rules | Capped by loan-to-value and occupancy |
| Occupancy | Primary residence | Primary residence | Primary, second home, or investment |
| Assumable | Yes, by a qualified buyer with servicer approval | Yes, by a qualified buyer | Generally no |
What happens between a signed contract and the closing table.
Appraisal
The lender orders it. On a VA loan it is a VA-assigned appraiser and the Notice of Value addresses both value and Minimum Property Requirements, so it can surface repair conditions a general inspection would treat as optional.
Underwriting conditions
Almost every file returns conditions: a source-of-funds letter, an updated pay stub, an explanation of a credit inquiry. Answering these the same day is the single biggest thing a buyer controls in the timeline.
Insurance and survey
Homeowner's insurance has to be bound before closing, and Texas transactions usually need an existing survey accepted or a new one ordered. Both are common late-stage delays.
Repair re-inspection
When the Notice of Value lists required repairs, the work has to be completed and verified before the loan closes. Scheduling a contractor and a re-inspection takes days that were not in the original calendar.
Closing Disclosure
Federal rules require you to receive the Closing Disclosure a set number of business days before signing, and certain changes restart that clock. This is why late-breaking loan changes move closing dates.
Final walk-through
Confirm the required repairs were actually done, not just invoiced. A walk-through that finds unfinished VA-required work the day before closing is a delay you can still prevent.
Clear Boundaries
Real estate representation and lending are separate.
Velvet Realty Group is a Texas real estate team brokered by LPT Realty, LLC and is not a mortgage lender. Jonathan Morris separately works as a Texas licensed Mortgage Loan Originator with REV Mortgage, NMLS #2792614. Buyers may choose any lender. Real estate representation by Velvet Realty Group is not conditioned on using Jonathan Morris or REV Mortgage for lending.
Where to take the lending questions.
For lender-side explanations of underwriting, program pricing, and the milestones around a purchase, review the VA home loan resources and the who does what from preapproval to closing guide from JMorris Home Loans. JMorris Home Loans is a separate mortgage resource presented by Jonathan Morris through REV Mortgage. These links are for general education, not a lender recommendation. Financing is separate from Velvet Realty Group's real estate services. Velvet Realty Group is not a lender. Buyers may choose any lender, and real estate representation by Velvet Realty Group is not conditioned on using Jonathan Morris or REV Mortgage.
Required VA Disclaimer
VA loan information on this page is general guidance only and is not a loan approval, loan commitment, rate lock, offer to extend credit, legal advice, tax advice, financial advice, lending advice, or an entitlement determination. Velvet Realty Group is a real estate brokerage and is not a mortgage lender, and does not quote interest rates or APR. Eligibility, entitlement, funding fee amounts and exemptions, occupancy requirements, appraisal outcomes, allowable charges, and loan terms must be verified with a licensed lender, the loan servicer, the VA, and appropriate professionals for your actual transaction.
San Antonio VA buyer questions
Can a real estate agent give me mortgage advice?
An agent can explain how loan programs work and how the loan interacts with your contract. An agent cannot approve you, price your loan, or quote you an interest rate or APR. Those belong to a licensed loan originator reviewing your actual file.
Do I need a down payment for a VA loan in San Antonio?
Not with full entitlement. An eligible buyer can finance the purchase price with no down payment, subject to lender approval and the appraised value. You will still need funds for your escrow deposit and any costs not covered by seller contributions or lender credits.
How do I get my Certificate of Eligibility?
Most lenders can pull it electronically through the VA system during preapproval. If the automated system cannot verify service, the request goes manual and needs a DD-214, a current statement of service, or the appropriate VA form for a surviving spouse. Start it early because a missing COE stalls an otherwise clean file.
Does the VA funding fee apply to every borrower?
No. The VA publishes exemptions that include veterans receiving compensation for a service-connected disability, certain surviving spouses, and Purple Heart recipients serving on active duty. Confirm your status with your lender before assuming the fee applies.
Can I use a VA loan more than once?
Yes. Entitlement generally restores when a prior VA loan is paid off, and second-tier entitlement can support two VA loans at the same time. That is how many JBSA households keep a San Antonio home as a rental after orders move them.
What is the difference between a home inspection and a VA appraisal?
An inspection is for you and is optional. A VA appraisal is for the lender, is required, and evaluates both value and Minimum Property Requirements. A home can pass an inspection and still need repairs before the VA appraisal will clear.
How much can a seller pay toward my costs on a VA loan?
A seller paying your allowable closing costs and prepaid items is not counted as a concession under the VA rule and carries no VA-imposed cap. Separately, the VA caps true concessions, such as paying your funding fee or a temporary buydown, at four percent of the established reasonable value. Lender and investor limits still apply.
Do I have to move in right away?
You certify that you intend to occupy the home as your primary residence within a reasonable time, which the VA generally treats as sixty days. There are documented accommodations for service members whose reporting date or deployment makes that impractical, including spouse occupancy. Give your lender the actual dates.
Can I combine the Hero Rebate with VA financing?
They are separate things and can coexist, but the rebate has to be reflected correctly on the Closing Disclosure and your lender decides how it is treated in cash to close. Confirm the treatment before you plan around it.
Do I have to use Velvet Realty Group's suggested lender?
No. You may choose any lender. Real estate representation by Velvet Realty Group is never conditioned on your choice of lender.
Sources
- VA home loan eligibility for service requirements, surviving spouse eligibility, and Certificate of Eligibility documents.
- VA funding fee and closing costs for the published fee schedule, exemptions, allowable charges, and the seller concession rule.
- VA loan limits for how remaining entitlement interacts with county limits.
- VA Lenders Handbook M26-7 for occupancy requirements, appraisal procedure, and Minimum Property Requirements.
- FHA Single Family Housing Policy Handbook 4000.1 for FHA minimum down payment, mortgage insurance premium duration, and program eligibility rules.
- Fannie Mae single-family mortgage products for conventional low-down-payment product parameters.
- CFPB on removing private mortgage insurance for the loan-to-value thresholds at which conventional PMI may be cancelled or must be terminated.
- TREC One to Four Family Residential Contract (Resale) for earnest money, option fee, and termination option mechanics.
- Texas Real Estate Commission for guidance on rebates of a license holder's commission to a party in the transaction.
Planning a VA purchase in San Antonio?
Request a real estate consultation with Velvet Realty Group. If you already have a lender, bring that lender's current documentation and contact information so the transaction calendar can be coordinated.