Every week, I talk to military buyers in San Antonio who are paying more to buy a home than they need to—not because they lack options, but because nobody has clearly explained the VA loan to them. The VA loan is one of the most valuable financial benefits of military service. If you’re eligible and you’re not using it, I want to change that.
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This guide covers everything you need to know: how VA loans work, who qualifies, what they cost, what to watch out for, and why San Antonio specifically is one of the best markets to use one.
$0
Down payment required for eligible VA loan borrowers
0%
Private mortgage insurance — VA loans have none
JBSA
Joint Base San Antonio — one of the largest military installations in the U.S.
What Is a VA Loan?
A VA loan is a mortgage loan backed (guaranteed) by the U.S. Department of Veterans Affairs. The VA doesn’t lend the money directly — private lenders (banks, credit unions, mortgage companies) originate VA loans, and the VA’s guarantee reduces the lender’s risk. That reduced risk is what allows lenders to offer significantly better terms to VA-eligible borrowers.
The VA loan benefit was created in 1944 as part of the original GI Bill, and it remains one of the most meaningful ongoing benefits of military service. It has helped millions of veterans and service members become homeowners — with no down payment required.
The VA Loan Advantage: What Makes It Different
Zero Down Payment
No down payment required for eligible borrowers with full entitlement. This alone separates the VA loan from every other mainstream mortgage product.
No PMI (Private Mortgage Insurance)
Conventional loans require PMI when you put less than 20% down. FHA loans require MIP regardless. VA loans have neither — which can save hundreds per month.
Competitive Interest Rates
VA loans typically offer interest rates below conventional loan rates. Over a 30-year mortgage, even a 0.5% rate difference can mean tens of thousands in savings.
More Flexible Qualification
VA loans are more forgiving on credit scores and debt-to-income ratios than conventional loans. The VA guarantee gives lenders confidence to approve buyers who might not qualify elsewhere.
Reusable Benefit
You can use your VA loan benefit more than once. If you’ve paid off a previous VA loan or sold the home, your entitlement is typically restored. Even with partial entitlement, you can often buy again.
Assumption Option
VA loans can be assumed by a qualified buyer when you sell — meaning if you locked in a low rate, a future buyer can take over that rate. In a rising rate environment, this is a significant selling advantage.
Who Is Eligible for a VA Loan?
VA loan eligibility is based on your military service. Here are the general eligibility categories — but always verify your specific eligibility with the VA or a VA-approved lender:
- Active duty service members — generally eligible after 90 continuous days of active service
- Veterans — eligibility depends on length and type of service; generally, 90 days during wartime or 181 days during peacetime
- National Guard and Reserve members — typically eligible after 6 years of service, or 90 days of active-duty orders
- Surviving spouses — unremarried surviving spouses of veterans who died in service or from a service-connected disability may be eligible
To confirm your eligibility, you’ll need a Certificate of Eligibility (COE). Your lender can usually obtain this for you electronically in minutes through the VA’s automated system — it doesn’t require a separate application in most cases.
The VA Funding Fee: What It Is and Who’s Exempt
The VA loan comes with one cost that surprises many first-time buyers: the VA funding fee. This is a one-time fee paid to the VA (not to your lender) that helps sustain the loan program. It’s typically between 1.25% and 3.3% of the loan amount, depending on your down payment, loan type, and whether you’ve used the VA loan before.
The good news: you can roll the funding fee into your loan rather than paying it out of pocket at closing. And certain borrowers are completely exempt from the funding fee:
- Veterans receiving VA disability compensation
- Veterans entitled to disability compensation but receiving retirement pay
- Surviving spouses of veterans who died in service or from service-connected disability
- Purple Heart recipients on active duty
If you have a service-connected disability rating, confirm your exemption status before closing — it can mean thousands of dollars in savings.
Disability rating tip: If you have a pending VA disability claim, you may want to wait until it’s resolved before closing on a home. If your claim is approved with a retroactive effective date that predates your closing, you may be entitled to a refund of the funding fee. Discuss this timing with a VA-savvy lender.
What Are VA Loan Closing Costs?
While VA loans have no down payment requirement, closing costs still apply. The VA limits which fees a veteran can be charged (lenders can’t charge excessive or “junk” fees), but expect costs that typically include:
- Loan origination fee (capped at 1% of the loan amount)
- VA appraisal fee (the VA requires its own appraisal, which is typically $500–$800 in Texas)
- Title insurance and title fees
- Recording fees
- Prepaid items (homeowner’s insurance, property tax escrow, prepaid interest)
A skilled negotiator can often get the seller to cover some or all of these closing costs as a “seller concession.” In San Antonio’s current market, seller concessions are negotiable — and I advocate hard for them on behalf of my buyers.
Can VA Loans and Down Payment Assistance Be Combined?
Yes, in some cases — though the combination requires careful planning. Since VA loans already offer $0 down, DPA assistance for a VA borrower typically gets applied toward closing costs rather than the down payment. This can effectively get a qualified veteran to closing with nothing out of pocket.
Not all DPA programs are compatible with VA loans, and the rules change. A lender who knows both VA lending and Texas DPA programs is essential here.
Buying Near JBSA: A Local Perspective
San Antonio is home to Joint Base San Antonio, which encompasses Lackland Air Force Base, Randolph Air Force Base, and Fort Sam Houston. The city has a massive active-duty and veteran population — and it’s one of the most VA-loan-friendly real estate markets in the country because of it.
A few things to know if you’re buying in San Antonio as a military buyer:
- VA appraisers are familiar with the market. In some markets, VA appraisals come in low and derail deals. San Antonio appraisers are experienced with VA transactions, which means fewer surprises.
- Many sellers have sold to VA buyers before. The stigma that some markets attach to VA offers (mostly unfounded) is minimal in San Antonio. Sellers here know VA loans close.
- The northeast quadrant is particularly convenient for JBSA Randolph. Universal City, Converse, and Schertz offer some of the most affordable prices and shortest commutes for Randolph personnel.
- BAH rates in San Antonio. Your Basic Allowance for Housing (BAH) for San Antonio may go further here than in more expensive military markets — meaning you can often buy a home with a mortgage payment that’s comparable to your BAH.
Read our dedicated guide to buying near JBSA →
Want the full breakdown, including the exact numbers?
Grab the free First-Time Homebuyer Guide below.
VA Loan vs. FHA Loan: A Quick Comparison for San Antonio Buyers
| Feature | VA Loan | FHA Loan |
|---|---|---|
| Down Payment | $0 (with full entitlement) | 3.5% minimum (580+ credit) |
| Mortgage Insurance | None | MIP required for life of loan (in most cases) |
| Min. Credit Score | Lender-set (typically 580–620) | 580 (for 3.5% down) |
| Eligibility | Military/Veterans only | Open to all qualifying buyers |
| Funding Fee | 1.25–3.3% (can roll in; some exempt) | No equivalent fee |
| Interest Rates | Typically lower than FHA | Typically higher than VA |
If you’re eligible for both, the VA loan is almost always the better financial choice — but a lender can run the exact numbers for your situation.
