Virginia VA loan glossary
Mike Certo · Cornerstone First Mortgage · NMLS #260555 ·
VA loans + Virginia-specific Veteran programs have a vocabulary of their own. This glossary collects the terms Veterans actually encounter, plain-English definitions, and Virginia-relevant context where useful. Bookmark this page.
Program figures verified July 2026. Details change; confirm your scenario with us.
A
AMI (Area Median Income): Income benchmark used by Virginia Housing Down Payment Assistance (DPA) programs to determine eligibility. Virginia AMI varies by region; Virginia Housing income limits are set by area.
Assumable: A VA loan can be assumed by a qualified buyer (Veteran or non-Veteran). The original Veteran's entitlement stays tied to the loan unless the assuming party is also a Veteran substituting their own entitlement. Full guide.
ARM (Adjustable Rate Mortgage): VA permits ARMs but most VA loans are fixed-rate. Less common in Virginia market.
B
BAH (Basic Allowance for Housing): Monthly housing stipend paid to active-duty service members. Varies by base + rank + dependent status. 2026 Naval Station Norfolk E-5 with dependents is $2,430 (Norfolk MHA). BAH calculator.
Back-end DTI: Total debt obligations (PITI + other monthly debts) as a percentage of gross income. VA guideline: 41%. Some lenders accept higher with strong residual income.
C
Cash-out refi: VA refinance that pulls equity out of the home. VA allows up to 100% LTV cash-out (higher than conventional 80% cap). Funding fee applies (2.15% first use / 3.30% subsequent).
Community Development Authority (CDA) assessments: Some Virginia master-planned communities carry CDA special assessments on top of HOA dues. They add to monthly housing cost, and the VA underwriter includes them in your DTI.
Closing costs: Fees paid at closing, typically 2-4% of loan amount. VA caps several. Seller can pay up to 4% in concessions.
Cluster home: Detached or semi-detached home in a planned community with shared common-area maintenance. Common in Virginia retirement communities. VA loan eligible if HOA approved.
COE (Certificate of Eligibility): VA-issued document confirming a Veteran's eligibility for the VA loan benefit. Free, obtained through VA.gov or via Mike. Required before VA loan can close.
Compensation: VA disability monthly payment based on rating (10%-100%). Federally tax-free in all states.
Conforming loan limit: Maximum loan size for standard VA (or conventional) financing. 2026 baseline: $832,750 in most of Virginia; Northern Virginia's high-cost counties go up to $1,249,125.
D
DD-214: Discharge document issued at military separation. Used to verify VA loan eligibility + claim other Veteran benefits.
Disability rating (VA): Percentage rating (0% to 100%, in 10% increments) assigned by VA based on service-connected disabilities. 10%+ = waives VA funding fee. 100% P&T in Virginia = full real-estate tax exemption on the home + one acre (§58.1-3219.5).
DPA (Down Payment Assistance): Virginia programs that provide grants or forgivable seconds to help with down payment + closing costs. Top programs: Virginia Housing DPA Grant, Closing Cost Assistance Grant, and the Plus Second Mortgage. Stacker guide.
DTI (Debt-to-Income ratio): Total monthly debt divided by gross monthly income. VA guideline: 41% back-end. Front-end (PITI only) typically should be ≤29%.
E
Earnest money deposit (EMD): Money buyer puts up at offer acceptance to show good faith. Standard Virginia EMD is 1% of price; 2-3% strengthens VA offers in competitive markets.
Entitlement: The VA's guaranty backing your loan. With full entitlement the VA guarantees 25% of the loan amount, about $208,000 on a baseline-limit loan in 2026, and there is no cap on loan size. With partial entitlement (an active prior VA loan), your $0-down amount is limited by the county loan limit.
Equitable distribution: Virginia is a common-law, equitable-distribution state (not a community-property state). Marital property is divided fairly rather than automatically 50/50.
Escrow account: Account where lender holds property tax + insurance funds and pays them when due. Most Virginia VA loans use escrow.
F
FAIR Plan (Virginia Property Insurance Association): Insurance of last resort for homes that can't get standard market coverage. In Virginia that's the Virginia Property Insurance Association, most often used for wind-exposed coastal properties. More expensive, more limited coverage.
FHFA limit: Federal Housing Finance Agency conforming loan limit. 2026 baseline: $832,750 in most of Virginia's 95 counties and 38 independent cities; Northern Virginia's high-cost areas run up to $1,249,125.
First use: A Veteran's first time using VA loan benefit. Lower funding fee (2.15% at $0 down) vs subsequent use (3.30%).
Front-end DTI: PITI as a percentage of gross income. VA prefers ≤29% but DTI alone doesn't decide approval.
Funding fee: One-time VA fee paid at closing (can be financed). 2.15% first use, 3.30% subsequent at $0 down. Waived for 10%+ disability rating. Calculator.
G
Gross income: Income before taxes. Used for DTI calc.
Gross-up: Treatment of tax-free income (VA disability, BAH, etc.) as higher equivalent taxable income for mortgage qualification. Standard 25% boost. Calculator.
H
Disabled Veteran property tax exemption (Virginia): Under Va. Code §58.1-3219.5 (2011 constitutional amendment), a 100% permanent-and-total service-connected disabled Veteran is fully exempt from real estate tax on a primary residence (plus up to one acre); an unremarried surviving spouse keeps it. Full guide.
HOA (Homeowners Association): Community association charging monthly/annual fees for shared amenities + maintenance. Common in Virginia master-planned communities. Affects VA DTI calculation.
Closing Cost Assistance (CCA) Grant: Virginia Housing grant of up to about 2% of the price toward closing costs; on a VA loan it can be applied to the VA funding fee. Strong stacker with VA.
Virginia Housing DPA Grant: A statewide down payment assistance grant that never has to be repaid, used with an eligible Virginia Housing loan.
I
IRRRL (Interest Rate Reduction Refinance Loan): VA simplify refi. No income docs, no appraisal, no funding fee if disability waiver. Must pass VA's 36-month recoupment test. Calculator.
Inspection: Buyer-paid home inspection (separate from VA appraisal). Identifies condition issues + bargaining points.
J
Joint VA loan: Two Veterans buying together can use combined entitlement. Each contributes their entitlement; combined down-payment requirement scales accordingly.
Jumbo VA: VA loan above the FHFA conforming limit for the county ($832,750 in most of Virginia). Veterans with full entitlement can finance to ~$4M with select lenders.
L
Land lease: Property where you own the home but lease the land. Rare in Virginia. VA typically can't finance.
LO (Loan Officer): Mortgage professional originating loans. Mike is an LO at Cornerstone First Mortgage. NMLS #260555.
LTV (Loan-to-Value ratio): Loan amount divided by appraised property value. VA allows 100% LTV (and effectively higher with funding fee financed).
M
MCC (Mortgage Credit Certificate): Federal tax credit for a portion of mortgage interest paid. Virginia Housing suspended new MCC reservations in May 2023; existing MCCs remain valid for the life of the loan, but the credit is not available on new purchases.
MHA (Military Housing Area): Geographic area used to set BAH rates. Naval Station Norfolk, NAS Oceana, and JB Langley-Eustis fall in the Hampton Roads MHA; the Pentagon and Quantico fall in the higher Northern Virginia / DC MHA.
MPR (Minimum Property Requirements): VA's property standards. Sound roof, adequate heat, adequate water/sewer, no major safety issues. In Virginia a wood-destroying insect (termite) inspection is standard on VA purchases.
N
NADL (Native American Direct Loan): VA loan program for Native Veterans on tribal trust land. VA is the direct lender. Full guide.
Naval Station Norfolk: The U.S. Navy base in Norfolk, the largest naval base in the world; the anchor of the Hampton Roads military community. Base hub page.
Net income: Income after taxes. Used for VA residual income calc.
NMLS: Nationwide Multistate Licensing System for mortgage professionals. Mike: NMLS #260555. Cornerstone: NMLS #173855.
O
Occupancy: VA requires primary residence occupancy within 60 days of closing. No exception for second homes or investment property.
Origination fee: Lender fee for processing the loan. VA caps at 1% of loan amount.
P
Virginia Housing Plus Second Mortgage: A second lien that pairs with a Virginia Housing first mortgage to help with down payment and closing costs, for buyers over grant income limits or who are not first-time buyers.
PCS (Permanent Change of Station): Military relocation between duty stations. 60-day window from arrival for VA primary-residence occupancy. Summer PCS tactics.
PITI: Principal, Interest, Taxes, Insurance. Total monthly housing payment. Calculator.
Pre-underwriting (TBD): Full underwriting before a specific property is identified. Strongest pre-approval format; Mike issues TBD letters for Virginia summer-PCS situations.
Primary residence: VA loan requirement. Must occupy as primary residence within 60 days of closing.
R
Reserves (military): National Guard + Reserve service. Reservists with 6+ years qualify for VA loan benefit.
Residual income: Net income remaining after PITI + utilities + debts. VA's hidden second qualifying test (separate from DTI). Required minimums by family size + region. Calculator.
Restored entitlement: VA entitlement restored after a previous VA loan is paid off (typically via home sale). Allows reuse for next purchase.
S
Seller concessions: Money seller agrees to pay toward buyer closing costs. VA allows up to 4%.
Subsequent use: Second or later use of VA benefit. Higher funding fee (3.30% at $0 down vs 2.15% first use).
Survivor benefits: Surviving spouse of KIA or service-connected disabled Veteran may be eligible for VA loan + property tax exemptions + Dependency and Indemnity Compensation.
T
TBD (To Be Determined): Pre-underwriting before property is identified. Strongest pre-approval letter format.
Term: Length of the loan. Standard VA is 30 years; 15-year and 20-year also available.
Tribal trust land: Land held in trust by the federal government for a tribe or individual Native American. Standard VA can't finance; NADL applies.
U
Underwriting: Lender's full review of borrower + property. Verifies income, credit, assets, property.
V
VA appraisal: VA-ordered appraisal verifying property value + MPR compliance. Different from buyer's inspection.
VA Builder ID: Registration number assigned by VA Regional Loan Center to qualified builders. Required for VA construction loans.
VA disability compensation: Monthly tax-free payment based on service-connected disability rating.
VA loan limit: Maximum loan size at full guaranty. 2026 Virginia baseline: $832,750; higher in Northern Virginia's high-cost counties.
Vested Veteran: Veteran who has earned the VA loan benefit through qualifying military service.
W
Wind/hail deductible: Separate percentage-based deductible (often 1-5% of dwelling coverage) common on coastal Virginia homeowners policies. It raises your real out-of-pocket exposure and can affect escrowed insurance cost. Flood + wind guide.
Z
Zero-down: Standard VA loan feature. No down payment required.
Term you encountered that's not here? Email Mike and he'll add it, this glossary grows as Virginia Veterans ask new questions.