VA Home Loan Guide for Veterans in McKinney, Texas
McKinney, Texas, located north of Dallas, has become one of the fastest-growing and most desirable suburbs in the nation. Known for its historic downtown, vibrant community, and award-winning schools, McKinney offers Veterans and military families an exceptional quality of life.
With diverse housing options—from charming older neighborhoods to new master-planned communities—McKinney provides ample opportunity to use your VA loan benefits. Whether you’re purchasing your first home or relocating to the Dallas–Fort Worth metroplex, McKinney offers space, amenities, and long-term value.
This guide walks you through everything Veterans need to know to buy or refinance a home in McKinney using a VA loan—including 2025 limits, eligibility, market trends, and Veteran-focused resources.
In this Article
McKinney Housing Market Outlook for 2025
McKinney remains one of the most desirable suburbs in the Dallas–Fort Worth metro area. Known for its charming historic downtown, excellent schools, and thriving job market, McKinney continues to attract military families looking for stability and value. As of 2025, the median home price in McKinney is approximately $490,000. Despite price appreciation, the city still offers better value than other North Dallas suburbs—and VA buyers benefit from 0% down financing and no PMI in this competitive market.
McKinney vs. Nearby Cities: 2025 Housing Comparison
| City | Median Home Price (2025) | Cost of Living Index | Population |
|---|---|---|---|
| McKinney | $490,000 | 106.3 | 208,000 |
| Frisco | $550,000 | 109.5 | 230,000 |
| Plano | $510,000 | 108.9 | 285,000 |
| Allen | $475,000 | 105.4 | 110,000 |
| Prosper | $630,000 | 118.2 | 37,000 |
VA Loan Limits for McKinney in 2025
The VA loan limit in Collin County—and across Texas—is $806,500 for 2025. Qualified Veterans with full entitlement can purchase a home up to this amount with no down payment. For homes exceeding that amount, a partial down payment is required only on the difference above the limit.
Why Choose a VA Loan in McKinney?
McKinney’s fast-growing housing market can make it difficult for first-time buyers to compete. VA loans give Veterans and active-duty service members a clear advantage with zero-down financing, lower interest rates, and no mortgage insurance. Combined with McKinney’s long-term appreciation potential, this makes it an excellent location to build equity and stability.
- 0% Down Payment: Finance 100% of the purchase price
- No PMI: VA loans never require monthly private mortgage insurance
- Lower Interest Rates: Typically 0.5%–1% lower than conventional loans
- Flexible Credit: Many VA lenders allow credit scores as low as 580
- No Prepayment Penalty: Pay off early with no fees or penalties
Who Qualifies for a VA Home Loan?
To be eligible for a VA home loan, applicants must meet certain criteria established by the U.S. Department of Veterans Affairs. These qualifications are based on your service duration, duty status, and the character of your discharge.
- Wartime Service: At least 90 consecutive days of active duty during a period of war.
- Peacetime Service: A minimum of 181 continuous days of active duty during peacetime.
- National Guard/Reserves: Six years of honorable service, or 90 active days under Title 32 (with at least 30 served consecutively).
- Veterans: Must have completed qualifying service and received an honorable or general discharge.
- Active-Duty Military: Current service members may be eligible based on time in service.
- Guard and Reserve Members: Eligibility applies with sufficient years of service or specific active-duty stints.
- Eligible Surviving Spouses: Spouses of service members who passed away in service or from service-connected causes may also qualify.
VA Loan Eligibility Calculator
VA Loan vs. Conventional Loan: 2025 Comparison
| Feature | VA Loans | Conventional Loans |
|---|---|---|
| Down Payment | 0% | 5%–20% |
| PMI | Not Required | Required under 20% |
| Interest Rate | Lower (avg. 6.2%) | Higher (avg. 6.8%) |
| Credit Score | 580–620 typical | 620+ minimum |
| Funding Fee | 2.3% (first use) | None |
| Prepayment Penalty | None | May apply |
VA Loan Eligibility and Obtaining Your COE
To qualify for a VA loan in McKinney, you must meet minimum service requirements set by the Department of Veterans Affairs. Once eligible, you’ll need a Certificate of Eligibility (COE) to confirm your entitlement before applying for a VA loan.
Who Qualifies for a VA Loan in McKinney?
- Wartime Service: 90 consecutive days of active duty
- Peacetime Service: 181 continuous days
- Guard/Reserve: 6 years or 90 days under Title 32 (with at least 30 consecutive)
- Veterans: Must have received an honorable discharge
- Surviving Spouses: Eligible if receiving DIC benefits
Getting Your Certificate of Eligibility (COE)
- Online: Via the VA eBenefits portal
- Through a Lender: Most VA-approved lenders can retrieve it instantly
- By Mail: Send VA Form 26-1880
Credit and Income Requirements
VA loans are designed to make homeownership easier for Veterans. Most lenders prefer a minimum credit score of 580–620, but other factors—like steady income and low debt—can help offset lower scores. There is no hard DTI limit, as long as VA residual income standards are met.
- Minimum Score: 580–620 (varies by lender)
- DTI Ratio: Target is 41%, but flexibility exists
- Income Sources: W-2, 1099, self-employment, VA disability, retirement, etc.
- VA Residual Income: Key requirement to qualify
Occupancy Guidelines
VA loans are only for primary residences. You must occupy the home within 60 days of closing. Multi-unit properties (up to 4 units) are eligible if you live in one unit full-time.
- Owner Occupancy: Required
- Move-In Deadline: Within 60 days of closing
- Multi-Unit Eligible: Duplex to fourplex if you live in one unit
- No Vacation Homes: VA financing is not allowed
VA Funding Fee in 2025
The VA funding fee helps fund the program and replaces monthly PMI. Most buyers pay 2.3% on first use with 0% down, but reduced fees or exemptions are available depending on service-connected disability status or down payment.
- First-Time Use: 2.3% of loan amount with no down payment
- Subsequent Use: 3.6% with no down payment
- Reduced Fee: 1.65% with 5% down; 1.4% with 10%+ down
- Exempt: 0% for Veterans with VA disability or Purple Heart
| Down Payment | First-Time Use | Subsequent Use |
|---|---|---|
| 0% | 2.3% | 3.6% |
| 5%–9.99% | 1.65% | 1.65% |
| 10% or more | 1.4% | 1.4% |
| VA Disability / Purple Heart | 0% (Exempt) | |
Using Your VA Loan Entitlement in McKinney
Full entitlement allows 100% financing up to $806,500 in Collin County. If you’ve used your benefit previously, you may still be eligible through partial entitlement or restoration.
- Basic Entitlement: $36,000 loan guarantee for amounts under $144,000
- Bonus Entitlement: Available for homes above $144,000
- Full Entitlement: Up to $806,500 with no down payment
- Partial Entitlement: May require down payment if benefit is still in use
- One-Time Restoration: Allows reuse of benefits after home is sold
- Form 26-1880: Submit to restore eligibility
VA Appraisal and Property Standards
All VA-financed homes must meet Minimum Property Requirements (MPRs) to ensure they’re safe, structurally sound, and sanitary. While a VA appraisal is required, we also recommend a private home inspection.
- Heating, Cooling, Electrical: Must be functional and safe
- Roof and Foundation: No significant damage or deterioration
- Plumbing: Working hot/cold water and sewage system
- Health Risks: Free of mold, asbestos, and lead paint issues
- Pest-Free: No active termite infestations or rot
- Ingress/Egress: Safe exit access required for all living spaces
VA Refinance Options in McKinney
VA Streamline Refinance (IRRRL)
Designed for current VA loan holders, the IRRRL helps you lower your interest rate quickly with limited paperwork, no appraisal, and no income verification in most cases.
- Only for existing VA loans
- No appraisal or COE typically needed
- Lower your interest rate or switch to a fixed rate
- 0.5% funding fee applies (unless exempt)
VA Cash-Out Refinance
This option allows you to tap into your home’s equity—even if your current mortgage isn’t a VA loan. Use funds for home improvements, debt consolidation, or major expenses.
- Available for VA and non-VA loans
- Requires full appraisal and underwriting
- Funding fee: 2.3%–3.6% (unless exempt)
- Cash can be used for any legal purpose
The Bottom Line
McKinney’s growing market and high quality of life make it an excellent place for Veterans to own a home. With no required down payment, no PMI, and flexible credit guidelines, the VA loan gives military families more buying power in a competitive market. Whether you’re buying or refinancing, leveraging your VA benefits in McKinney is a smart move. Check Rates and Start Your Pre-Approval Today
Frequently Asked Questions About VA Loans in McKinney
1. What is the VA loan limit in McKinney for 2025?
The VA loan limit in McKinney and all of Texas is $806,500 in 2025. Veterans with full entitlement can buy up to this amount with no down payment.
2. Is McKinney a good place to use a VA loan?
Yes. McKinney offers excellent schools, low crime, and strong long-term home value—ideal for Veterans using their VA benefits.
3. Can I use a VA loan to buy a new construction home in McKinney?
Yes. New construction is allowed with VA loans if the builder is VA-approved and the home meets property standards.
4. What credit score do I need for a VA loan in McKinney?
Most lenders prefer scores between 580–620, but there’s no official VA minimum. Strong income and residuals help offset credit.
5. Do VA loans include mortgage insurance?
No. VA loans do not require private mortgage insurance (PMI), even with 0% down, which saves you money monthly.
6. Can I refinance a non-VA loan into a VA loan?
Yes. The VA Cash-Out Refinance lets you switch from a conventional or FHA loan into a VA-backed mortgage—even with equity access.
7. How do I get my Certificate of Eligibility (COE)?
You can retrieve your COE online via the VA eBenefits Portal, through a lender, or by submitting Form 26-1880 to the VA.
8. Can I buy a duplex or multi-unit property with a VA loan?
Yes. You can buy up to a fourplex with a VA loan, as long as you live in one of the units as your primary residence.
9. Are there local Veteran homebuyer programs in McKinney?
Yes. You may qualify for extra help through the TSAHC Homes for Texas Heroes or Texas Veterans Land Board.
10. Can I use my VA loan more than once?
Yes. VA loans are reusable after you restore your entitlement. You can use it multiple times throughout your life.
