Texas VA Funding Fee Increase: What Changes for Veterans

Texas has one of the biggest military communities in the country, and a bill in Congress would make it more expensive for many of those families to lower their VA mortgage rate or take over one.

Here's what the Take Care of America's Veterans Act would change, how much it would add on typical Texas loans, where the Texas Veterans Land Board fits in, and who wouldn't pay a cent more.

Check Your Texas Home Purchase Eligibility as a Veteran

By the end, you'll know whether to act on a refinance or assumption now or wait for the Senate.

Where the bill stands (November 13, 2026): H.R. 9237 passed the House on November 11, 2026. The Senate version is S. 4744. Until it becomes law, the current VA funding fees apply to every Texas VA loan.

The Short Version

• The VA streamline refinance (IRRRL) funding fee would rise from 0.5% to 1.42% of the loan amount
• The fee to assume someone else's VA loan would rise from 0.5% to 1%
• Purchase and cash-out refinance fees stay where they are
• Veterans receiving disability compensation still pay no funding fee
• Some Texas Guard and Reserve members would become eligible for VA loans, at a fee 1 point above the standard table
• The House text dates the change to October 1, 2026

The Fees Before and After

These changes come from Section 104 of the bill, which uses the higher loan fees to help pay for other veterans benefits in the package.

What It Adds on a Texas Loan

The median Texas home costs far less than in coastal states, so the dollar increase is smaller here. It still adds up.

For an assumption, a buyer taking over a $300,000 VA balance would pay $3,000 instead of $1,500. That fee is due at closing.

See If You Qualify for a Texas VA Loan

Refinancing a VA Loan in Texas

A streamline refinance is the simplest way for a Texas veteran to drop the rate on an existing VA loan. It's a rate-and-term refinance, so Texas's cash-out rules don't apply, and it usually needs no appraisal.

Example: A veteran in San Antonio owes $325,000 at 7.25%. Refinancing to 6.25% cuts principal and interest from about $2,217 to about $2,001, a savings of about $216 a month. Assume $2,800 in other closing costs:

• At today's $1,625 funding fee, the refinance pays for itself in about 21 months
• At the proposed $4,615 fee, it takes about 34 months

The VA's own 36-month recoupment test leaves the funding fee out, so a refinance can pass the VA's test and still take you longer to come out ahead. Run the math with the fee included.

If your loan includes a Texas Veterans Land Board portion: the VLB doesn't refinance its loans. A new lender has to pay off the whole loan, VLB portion included. Ask how that works and whether you'd give up a VLB disability rate discount before you apply. Our Texas VLB home loan guide explains how those loans are set up.

Check Your Texas VA Loan Eligibility

Buying a Home With an Assumable VA Loan in Texas

Neighborhoods near Fort Cavazos, Fort Bliss, and Joint Base San Antonio turn over often as families move to new duty stations. Many of those sellers have VA loans at rates well below today's, and VA loans can be assumed by any buyer who qualifies, veteran or not.

Even at a 1% fee, keeping a 3% rate on a $300,000 balance can save thousands of dollars a year compared with a new loan. Three things decide whether it works:

• Cash for the seller's equity: you pay the gap between the price and the remaining balance, in cash or with a second loan the VA allows
• The servicer's approval: the seller's loan servicer reviews your credit and income, and some move faster than others
• The seller's entitlement: unless you're an eligible veteran who substitutes your own entitlement, the seller's VA entitlement stays tied to the loan

Texas Veterans Who Won't Pay More

The fee increase only applies if you owe the fee in the first place. You're exempt if you:

• Receive VA compensation for a service-connected disability, at any rating
• Are eligible for disability compensation but receive retirement or active-duty pay instead
• Are a surviving spouse receiving Dependency and Indemnity Compensation
• Have a proposed or memorandum rating from a pre-discharge claim, issued before closing
• Are on active duty and received the Purple Heart, with proof by the closing date

Texas adds property tax relief on top of that. A service-connected rating of 10% or more takes $5,000 to $12,000 off the taxable value of one property, and a 100% or individually unemployable rating with 100% compensation exempts your entire homestead. See our Texas disabled veteran property tax exemption guide for every rating.

A New Path for Texas Guard and Reserve Members

The bill also opens VA home loans to Guard and Reserve members who aren't eligible today. To qualify, you'd need at least 14 days on active duty for training, followed by completion of your entry-level and skill training.

The trade-off is cost. These borrowers would pay the standard funding fee plus 1 percentage point. On a $325,000 first-use purchase with no money down, that's $10,238 instead of $6,988. It's still a way to buy with no down payment and no monthly mortgage insurance.

Check Your Texas Home Purchase Eligibility

Timing: Should You Close Before the Senate Votes?

Don't count on it. The House version says the higher fees take effect October 1, 2026, which has already passed. If the bill becomes law with that date, the VA will decide how to treat loans that closed between October 1 and the signing date.

A rate lock doesn't protect the funding fee, either. It holds your interest rate, while the fee is set by federal law. The Senate may also rewrite the fees or the date.

Refinance or assume a loan because the numbers work at either fee, not to beat a deadline.

Your Next Steps

1. Confirm your fee status: your Certificate of Eligibility shows whether you're exempt.
2. Pull your current loan details: balance, rate, years left, and whether a VLB portion is part of it.
3. Compare the break-even: ask for your payback period at both the current and proposed fee.
4. Look at the whole menu: a streamline refinance, an assumption, a new VA purchase, or a Texas VA loan with a VLB rate.

Next Wave Mortgage works with Texas veterans on VA purchases, refinances, and assumptions, and we'll tell you plainly if your current loan is the better deal.

See If You Qualify for a Texas VA Loan

This guide covers proposed federal legislation as of November 13, 2026. All loans are subject to credit approval and VA program guidelines.