Texas is home to more active-duty service members than almost any other state, with major posts from Fort Hood to Joint Base San Antonio to Fort Bliss. If your orders point you to the Lone Star State, there is good news beyond the barbecue: Texas VA loan benefits stack unusually well. On top of the federal VA (Department of Veterans Affairs) loan, Texas adds no state income tax, some of the strongest veteran property tax exemptions in the country, and its own home loan program for veterans. Used together, these can save a military family real money for as long as they own the home. Here is how the pieces fit.
The Federal VA Loan, in Plain English
Start with the benefit you already earned. A VA loan lets eligible service members and veterans buy a primary home with no down payment and no private mortgage insurance, usually at competitive rates. You pay a one-time VA funding fee, which is waived if you have a service-connected disability rating. If you are new to the program, read what are the benefits of a VA loan and how a $0 down VA loan works first.
Everything below is what Texas adds on top of that federal foundation.
Texas Benefit 1: No State Income Tax
Texas is one of a handful of states with no state income tax. For a military family, that means your pay, and a working spouse's pay, are not taxed by the state. Over a three-year tour, keeping that money can add up to thousands of dollars that a family in a high-tax state would never see. It is a quiet benefit, but it is one reason Texas stretches a military paycheck further.
Texas Benefit 2: Veteran Property Tax Exemptions
Texas has no state income tax, so it leans more on property taxes, which run higher than the national average. That is exactly why the state's veteran property tax exemptions matter so much. They come in two forms.
For veterans with a partial disability rating, the state offers a fixed exemption off a property's value, based on the rating.
| VA disability rating | Exemption up to |
|---|---|
| 10% to 29% | $5,000 |
| 30% to 49% | $7,500 |
| 50% to 69% | $10,000 |
| 70% to 100% | $12,000 |
Source: Texas Comptroller disabled veteran exemption FAQ, Tax Code Section 11.22.
The bigger benefit is for veterans rated 100 percent disabled. Under Tax Code Section 11.131, a veteran who receives 100 percent compensation from the VA due to a 100 percent disability rating or a determination of individual unemployability pays no property tax at all on their residence homestead. A surviving spouse of a service member killed in the line of duty can also qualify for a total homestead exemption.
Texas disabled veteran exemptions by rating. Source: Texas Comptroller.
For the full state-by-state picture and how to apply, see our guide to Texas veteran property tax exemptions.
Texas Benefit 3: The Texas Vet Loan
Texas runs its own home loan program through the Texas Veterans Land Board, part of the General Land Office. Often called the Texas Vet Loan, its Veterans Housing Assistance Program offers fixed-rate home loans for a veteran's primary residence in Texas. According to the Texas General Land Office, veterans with a service-connected disability rating of 30 percent or more can receive an added 0.5 percent discount on the rate, and the program is self-funded through bonds rather than taxpayer dollars.
A Texas Vet Loan is a separate program from the federal VA loan, and a local lender can help you compare the two and choose the better fit for your rate, term, and price range.
