VA Loan Glossary: 25+ Terms Every Veteran Should Know (2026)

Last updated: June 2026

Whether you are buying your first home with a VA loan or refinancing an existing one, the jargon can feel overwhelming. This glossary covers every term you are likely to encounter — from your initial Certificate of Eligibility request through closing day. Each definition is written in plain English with links to deeper guides where applicable.

Barrett Henry is a Military Relocation Professional (MRP) and Broker Associate with REMAX Collective, serving veteran and military homebuyers across Hillsborough, Pinellas, Pasco, Hernando, Citrus, Polk, Manatee, and Sarasota counties in Tampa Bay, Florida. Barrett does not originate loans — he helps Tampa Bay veterans understand the process and connects them with VA-experienced lenders.

A

Appraisal (VA)

An independent property valuation ordered by the lender and performed by a VA-assigned appraiser. The VA appraisal serves two purposes: it confirms the home meets Minimum Property Requirements (MPRs) and verifies the sale price is supported by comparable sales. If the appraisal comes in low, the buyer can negotiate, pay the difference, or walk away. Read more: VA Appraisal Process→

B

BAH (Basic Allowance for Housing)

A monthly tax-free payment the military provides to service members to cover housing costs when government quarters are not available. BAH rates vary by rank, dependency status, and duty station ZIP code. Lenders can use BAH as qualifying income on a VA loan. Read more: BAH & VA Loans→

C

Cash-Out Refinance

A VA refinance option that replaces your existing mortgage with a new, larger loan — letting you pull equity out as cash. You can borrow up to 100% of your home's appraised value. Common uses include paying off debt, funding home improvements, or covering emergency expenses. Read more: VA Refinance Options→

Certificate of Eligibility (COE)

A document issued by the VA that confirms you meet the military service requirements for a VA-backed home loan. You can request your COE online through the VA's eBenefits portal, by mail using VA Form 26-1880, or through your lender. Most lenders can pull it electronically in minutes. Read more: How to Get Your COE→

Closing Costs

Fees paid at settlement to finalize your home purchase or refinance. On a VA loan, closing costs typically run 2% to 5% of the loan amount. The VA limits which fees veterans can be charged (no broker commissions, no attorney fees charged by the lender). Sellers can pay all of the buyer's closing costs plus up to 4% in concessions. Read more: VA Closing Costs Explained→

Compensating Factors

Strengths in a loan application that offset a weakness. For example, if your debt-to-income ratio is high, a large amount of residual income, excellent credit history, or significant cash reserves can serve as compensating factors that allow the underwriter to approve your loan.

D

DD-214

The Certificate of Release or Discharge from Active Duty. This is the most important document for proving VA loan eligibility. It shows your dates of service, discharge type, and character of service. You need a discharge that is anything other than dishonorable to qualify. Read more: VA Loan Eligibility→

DTI (Debt-to-Income Ratio)

The percentage of your gross monthly income that goes toward debt payments (mortgage, car loans, credit cards, student loans). The VA does not set a hard DTI cap, but most lenders prefer 41% or below. Higher DTIs can be approved with strong compensating factors like residual income. Read more: VA Credit Requirements→

E

Entitlement

The dollar amount the VA guarantees on your loan. Full entitlement means you have never used your VA benefit or have fully restored it. Reduced (or partial) entitlement means you have an existing VA loan or a prior VA loan that was not fully repaid. Your entitlement amount determines how much you can borrow with $0 down. Read more: VA Loan Eligibility→

F

Funding Fee

A one-time fee paid to the VA (not your lender) that keeps the VA loan program running without requiring taxpayer funding. For first-time use with $0 down, the fee is 2.15% of the loan amount. It drops to 1.25% with a 5% down payment. Veterans with a service-connected disability rating of 10% or more are exempt. Read more: VA Funding Fee Explained→

I

IRRRL (Interest Rate Reduction Refinance Loan)

Also called a VA Streamline Refinance, the IRRRL lets you refinance an existing VA loan to a lower interest rate with minimal paperwork — no appraisal, no income verification, and no out-of-pocket costs in most cases. You must demonstrate a net tangible benefit (lower rate or switch from ARM to fixed). Read more: VA IRRRL Streamline Refinance→

J

Joint Loan

A VA loan where the veteran borrows with another person — either a spouse (veteran or non-veteran) or another eligible veteran. If the co-borrower is not VA-eligible, the VA only guarantees the veteran's portion, which may require a down payment on the non-veteran's half.

L

LES (Leave and Earnings Statement)

A monthly pay statement issued to active-duty service members showing gross pay, deductions, allowances (including BAH and BAS), and leave balances. Lenders typically require your most recent LES as part of income verification for a VA loan.

Loan Limit

The maximum amount you can borrow with $0 down using a VA loan. For veterans with full entitlement, there is no VA loan limit as of January 1, 2020 (Blue Water Navy Vietnam Veterans Act). Veterans with reduced entitlement are subject to conforming loan limits, which vary by county. Read more: Florida VA Loan Limits→

M

MPR (Minimum Property Requirements)

Standards the VA requires every property to meet before it will back a loan. MPRs cover safety (working utilities, no lead paint hazards, proper drainage), structural soundness (no major foundation issues, intact roof), and sanitary conditions. The VA appraiser checks MPRs during the appraisal. Read more: VA Property Requirements→

MRP (Military Relocation Professional)

A designation awarded by the National Association of REALTORS to agents who have completed training on working with military and veteran homebuyers. MRP-certified agents understand VA loans, PCS timelines, BAH, and the unique challenges of military relocation. Read more: Why Work With an MRP Agent→

N

Net Tangible Benefit

A VA requirement for refinances that proves the new loan provides a meaningful financial advantage. For an IRRRL, this usually means a lower interest rate (at least 0.5% reduction) or switching from an adjustable-rate to a fixed-rate mortgage. This rule protects veterans from predatory refinancing. Read more: VA IRRRL Streamline Refinance→

NOV (Notice of Value)

The document issued after a VA appraisal that states the appraiser's opinion of the property's market value. If the NOV comes in below the purchase price, the buyer can renegotiate the price, appeal via Reconsideration of Value, cover the gap with cash, or walk away without penalty. Read more: VA Appraisal Process→

P

PCS (Permanent Change of Station)

A military order transferring a service member from one duty station to another. PCS moves are one of the most common triggers for buying or selling a home. Knowing your PCS timeline helps determine whether buying or renting makes financial sense. Read more: PCS to Florida Guide→

PMI (Private Mortgage Insurance)

A monthly insurance premium required on conventional loans when the borrower puts less than 20% down. VA loans never require PMI — this is one of the program's biggest financial advantages. On a $350,000 home, eliminating PMI can save $100 to $200 per month. Read more: VA vs Conventional Loans→

R

Residual Income

The money left over each month after paying all major expenses (mortgage, taxes, insurance, debts, utilities, and maintenance). The VA is the only major loan program that uses residual income as a qualification requirement. The minimum varies by family size and region — for the South (including Florida), a family of four needs at least $1,003/month in residual income.

S

SAR (Staff Appraisal Reviewer)

A VA employee who reviews appraisals for accuracy, consistency, and compliance with VA guidelines. If there is a dispute over an appraisal value, the SAR may be involved in the Reconsideration of Value process.

T

Tidewater

A VA appraisal process triggered when the appraiser believes the property's value may come in below the purchase price. Before issuing a low appraisal, the appraiser notifies the lender, giving the buyer's agent 48 hours to submit additional comparable sales that support the contract price. This is a built-in safety net unique to VA appraisals. Read more: VA Appraisal Process→

V

VA Funding Fee Exemption

Veterans with a service-connected disability rating of 10% or more, surviving spouses of veterans who died in service or from service-connected disabilities, and active-duty Purple Heart recipients are exempt from paying the VA funding fee. This saves $6,000 to $10,000+ on a typical Tampa Bay home purchase. Read more: VA Funding Fee Explained→

Which VA Loan Terms Come Up Most Often?

Some terms appear at nearly every stage of the VA loan process. Here are the ones you will encounter most frequently and when they matter: