OR VA loan glossary
Mike Certo · Cornerstone First Mortgage · NMLS #260555 ·
VA loans and Oregon-specific Veteran programs have a vocabulary of their own. This glossary collects the terms Veterans actually encounter, plain-English definitions, and OR-relevant context where useful. Bookmark this page.
A
AMI (Area Median Income) — Income benchmark used by Oregon Housing and Community Services (OHCS) Down Payment Assistance (DPA) programs to set eligibility. The OHCS DPA program serves households at or below 100% AMI, with 25% of funds reserved for Oregon Veterans.
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 OR market.
B
BAH (Basic Allowance for Housing) — Monthly housing stipend paid to active-duty service members. Varies by duty location, rank, and dependent status. Counts as qualifying income on a VA loan. 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).
CFD (Community Facilities District) — Special assessment district used in some master-planned communities to fund infrastructure. Adds to the monthly housing cost, and the VA underwriter includes it in 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 OR 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.
Equitable-distribution state — Oregon divides marital property by what a court considers fair rather than an automatic 50/50 split. This is the opposite of the community-property model some Western states use, and it affects how a VA loan is titled and how divorce and estate planning interact with the home. A non-borrower spouse generally does not have to sign Oregon loan documents.
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 OR baseline: $832,750 statewide.
D
Defensible space — Cleared/maintained vegetation around a home in wildfire-prone areas. Required by VA MPR + OR Department of Forestry in WUI zones.
DD-214 — Discharge document issued at military separation. Used to verify VA loan eligibility and to claim other Veteran benefits.
Disabled-Veteran property tax exemption (Oregon) — Oregon exempts a fixed amount of a home's assessed value from property tax for Veterans with a 40% or higher rating who own and occupy the home as their primary residence. For 2026-27 the exemption is $32,512 of assessed value for service-connected and $27,092 for non-service-connected. File by April 1. A surviving spouse or partner who has not remarried may also qualify. Full guide.
Disability rating (VA) — Percentage rating (0% to 100%, in 10% increments) assigned by VA based on service-connected disabilities. A 10% or higher rating waives the VA funding fee. A 40% or higher rating qualifies an Oregon Veteran for the disabled-Veteran property tax exemption.
DPA (Down Payment Assistance) — Oregon programs that help with the down payment and closing costs. The main ones run through OHCS: the Oregon Bond Residential Loan (Cash Advantage and Rate Advantage), the OHCS Down Payment Assistance Program (up to $60,000 or 20% of price, whichever is less), and Flex Lending. 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 OR EMD is 1% of price; 2-3% strengthens VA offers in competitive markets.
Entitlement — Veteran's $0-down VA loan capacity. Currently $144,000 basic + 25% of FHFA conforming limit = roughly $208,000 total entitlement in 2026. Limits the $0-down amount; doesn't cap the loan size for Veterans with full entitlement.
Escrow account — Account where lender holds property tax + insurance funds and pays them when due. Most OR VA loans use escrow.
F
FAIR Plan (OR FAIR Plan) — Insurance of last resort for homes that can't get standard market insurance — typically high-wildfire-risk OR properties. More expensive, more limited coverage.
FHFA limit — Federal Housing Finance Agency conforming loan limit. 2026 baseline: $832,750 across all 15 OR counties.
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
HOA (Homeowners Association) — Community association charging monthly or annual fees for shared amenities and maintenance. Common in Oregon master-planned communities. Affects the VA DTI calculation.
I
IRRRL (Interest Rate Reduction Refinance Loan) — VA streamline 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 ($832,750 in OR). Veterans with full entitlement can finance to ~$4M with select lenders.
K
Kingsley Field — Kingsley Field Air National Guard Base in Klamath Falls, home of the 173rd Fighter Wing, the Air Force's F-15 and F-35 training base. Oregon's largest military aviation presence and a common posting for Guard members buying nearby. Oregon Guard base hub.
L
Land lease — Property where you own the home but lease the land. Rare in OR. 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 when the funding fee is financed.
M
MCC (Mortgage Credit Certificate) — Federal tax credit for a portion of mortgage interest paid. Administered in Oregon through OHCS. Can stack with a VA loan and DPA.
MHA (Military Housing Area) — Geographic area used to set BAH rates. Klamath Falls, Portland, and the coast each fall in their own MHA, so BAH varies by where you are stationed in Oregon.
MPR (Minimum Property Requirements) — VA's property standards. A sound roof, working heat, adequate water and sewer, no major safety issues, and defensible space in wildfire areas.
N
NADL (Native American Direct Loan) — VA loan program for Native Veterans on tribal trust land. VA is the direct lender. Full guide.
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.
Oregon Bond Residential Loan — OHCS first-mortgage program with two options: Cash Advantage offers a below-market rate plus 3% of the loan amount toward closing costs, and Rate Advantage offers a lower rate with no cash assistance. Can pair with a VA loan. Stacker guide.
Origination fee — Lender fee for processing the loan. VA caps it at 1% of the loan amount.
ORVET (Oregon Veteran Home Loan) — A separate state home-loan program run by the Oregon Department of Veterans' Affairs since 1945. Purchase-only, owner-occupied single-family, usable up to four times in a lifetime, with no funding fee and rates roughly 0.5% to 0.75% below conventional and federal VA. Distinct from a federal VA loan.
P
PCS (Permanent Change of Station) — Military relocation between duty stations. There is a 60-day window from arrival for VA primary-residence occupancy. Relocation buyer 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 OR 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 a service member killed in action or a service-connected disabled Veteran may be eligible for a VA loan, property tax exemptions, and 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 OR baseline: $832,750.
Vested Veteran — Veteran who has earned the VA loan benefit through qualifying military service.
W
Wildfire Factor — Property-specific wildfire risk score (1-10). Higher scores affect insurance availability + costs. Wildfire guide.
WUI (Wildland-Urban Interface) — Areas where development meets wildland. Subject to defensible-space requirements. In Oregon this means the forested edges around Medford, Ashland, Bend, and the Cascade foothills.
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 Oregon Veterans ask new questions.