Your complete dictionary of VA home loan terminology for Nevada veterans. From Certificate of Eligibility to residual income requirements, understand every term in the VA loan process. Essential reading for military homebuyers in Las Vegas, Reno, Henderson, and throughout Nevada.
Essential VA loan terminology from Amortization to APR
A current member of the U.S. Armed Forces serving full-time. Active duty members typically qualify for VA loan benefits after 90 consecutive days of service during wartime, or 181 days during peacetime. Nevada has significant active duty populations at Nellis Air Force Base and Creech Air Force Base.
Nevada Example: An active duty airman stationed at Nellis AFB with 100 days of service can apply for VA home loan pre-approval to buy a home in North Las Vegas.
A mortgage loan where the interest rate can change over time based on market conditions. VA loans can be either fixed-rate or adjustable-rate. ARM loans typically start with a lower interest rate for an initial period (like 5/1 ARM = fixed for 5 years), then adjust annually. Less common in VA loans than fixed-rate mortgages.
Nevada Example: A veteran in Henderson might choose a 5/1 ARM VA loan if they plan to sell or refinance before the rate adjusts after 5 years.
The process of paying off your mortgage loan through regular monthly payments that include both principal and interest. In the early years, more of your payment goes toward interest; over time, more goes toward principal. A 30-year VA loan is fully amortized over 360 monthly payments.
Nevada Example: On a $400,000 VA loan at 6.5% in Las Vegas, your first payment might be $2,528 total - with $2,167 going to interest and only $361 to principal.
The true cost of borrowing expressed as a yearly rate. APR includes not just the interest rate, but also the VA funding fee, lender fees, and other closing costs, giving you a complete picture of loan cost. Always higher than the interest rate alone. Use APR to compare total costs between different VA loan offers.
Nevada Example: A Reno VA loan might show 6.25% interest rate but 6.48% APR once the 2.15% funding fee and lender costs are included in the calculation.
A professional assessment of a home's market value conducted by a VA-approved appraiser. Required for all VA purchase loans. The appraisal protects you by ensuring you don't overpay and that the property meets VA minimum property requirements (MPRs). The VA appraisal is more thorough than conventional appraisals because it includes a property condition assessment.
Nevada Example: When buying a $450,000 home in Henderson, a VA-approved appraiser will inspect the property, compare it to recent sales, and ensure it meets VA health/safety standards before your loan can close.
The process where a buyer takes over the seller's existing VA mortgage, keeping the same loan terms and interest rate. VA loans are assumable, meaning qualified buyers (veterans or non-veterans) can assume your loan. This can be a powerful selling point if your interest rate is lower than current market rates. The veteran must get approval from the VA to be released from liability.
Nevada Example: A Las Vegas veteran with a 3.5% VA loan from 2021 can let a buyer assume that low rate, making the home more attractive than properties requiring new 7% loans in 2025.
Military housing allowance paid to service members. BAH can be used as qualifying income for VA loan applications. The amount varies by rank, location, and dependency status. Nevada BAH rates are relatively high due to Las Vegas and Reno housing costs.
Nevada Example: An E-6 at Nellis AFB receives $2,376/month BAH (2025), which counts as stable income when qualifying for a VA loan in North Las Vegas.
Paying upfront points to permanently lower your interest rate. Each point typically costs 1% of the loan amount and reduces your rate by about 0.25%. Sellers can pay for buy-downs using concessions. Popular strategy when rates are high.
Nevada Example: On a $500K Henderson home, paying $5,000 (1 point) could reduce your rate from 6.75% to 6.5%, saving $83/month.
Refinancing your mortgage for more than you owe and taking the difference in cash. VA cash-out refinances let you access up to 100% of your home equity. Requires a VA appraisal and full underwriting. Funding fee is 2.15% for first use, 3.3% for subsequent use (unless disabled).
Nevada Example: A Reno veteran with a $300K home worth $450K could cash-out refinance to access $150K for home improvements, debt consolidation, or investment.
Official document from the VA proving you qualify for VA home loan benefits. Shows your military service dates, discharge status, and available entitlement. Required by lenders before approving a VA loan. Can be obtained online through eBenefits in minutes, through your lender, or by mail (26-1880 form).
Nevada Example: A Las Vegas veteran can pull their COE instantly online, showing full $806,500 entitlement available for Nevada home purchase with $0 down.
Fees paid at closing to finalize your mortgage. Includes lender fees, title insurance, recording fees, appraisal, credit report, etc. VA loans limit what veterans can be charged. Total typically 2-5% of loan amount. Sellers can pay up to 4% of the sale price toward your closing costs (seller concessions).
Nevada Example: On a $500K Henderson purchase, expect $10,000-$25,000 closing costs. With seller paying 4% ($20K), veteran brings only funding fee to closing.
Maximum loan amount for conventional mortgages set by FHFA. In 2025, it's $806,500 for most Nevada counties. VA loan limits match conforming limits for veterans with remaining entitlement. Veterans with full entitlement can borrow above limits with no down payment (lender approval required).
Nevada Example: Clark County (Las Vegas) and Washoe County (Reno) both have $806,500 conforming limits in 2025, allowing $0 down VA loans up to that amount.
Numerical rating (300-850) of your creditworthiness. VA has no minimum credit score requirement, but most lenders require 580-620. Higher scores get better interest rates. Compensating factors like stable income can offset lower scores. Veterans with past bankruptcy or foreclosure can still qualify after waiting periods.
Nevada Example: A veteran with 640 credit might get 6.5% rate in Las Vegas, while 740+ credit gets 6.0% - saving $150/month on a $400K loan.
Certificate of Release or Discharge from Active Duty. Official military discharge document showing dates of service, discharge status, and character of service. Required to obtain COE if applying by mail. Keep Member 4 copy - it's the most complete version. If lost, request from National Personnel Records Center.
Nevada Example: A Reno veteran's DD-214 showing "Honorable Discharge" after 6 years active duty Army proves VA loan eligibility.
Percentage of gross monthly income that goes toward debt payments. Calculated by dividing total monthly debts by gross monthly income. VA guideline is 41% DTI max, but exceptions possible with strong compensating factors. Includes new mortgage payment, car loans, student loans, credit cards, child support - but NOT utilities, phone, insurance, or food.
Nevada Example: Las Vegas veteran earning $6,000/month with $2,400 mortgage + $400 car = $2,800 debts = 47% DTI. May still qualify with residual income and compensating factors.
Monthly payments from VA for service-connected disabilities. Counts as stable income for loan qualification. Veterans with ANY VA disability rating (10% or higher) are exempt from VA funding fee - massive savings. Benefits are tax-free, so lenders "gross up" the income by 25% when calculating qualifying income.
Nevada Example: Henderson veteran rated 30% disabled ($524/month) = $655/month qualifying income AND $0 funding fee on $500K purchase (saving $10,750).
Upfront cash payment when buying a home. VA loans require $0 down payment up to conforming loan limits with full entitlement. Only loan program offering 100% financing with competitive rates. Conventional loans require 3-20% down. FHA requires 3.5% minimum.
Nevada Example: Buy a $600K Sparks home with VA loan = $0 down. Same home with conventional = $120K down (20%) or $18K (3%) + PMI.
Dollar amount VA guarantees to the lender if you default. Basic entitlement is $36,000. Bonus entitlement is $453,100 (2025), for total $489,100. With full entitlement, you can get $0 down loans above conforming limits. Entitlement is restored when you sell and pay off the VA loan. Can have remaining entitlement even with one VA loan active.
Nevada Example: Las Vegas veteran with $489,100 full entitlement can buy $806,500 home with $0 down (lender covers 4:1 ratio).
Good faith deposit made when submitting an offer showing you're serious. Typically 1-3% of purchase price in Nevada. Held in escrow and credited toward down payment/closing costs. Refundable if deal falls through due to contingencies. Not required for VA loans but expected by sellers.
Nevada Example: $5,000-$15,000 EMD typical on $500K Henderson home. Gets credited to closing, reducing cash needed at close.
Account where your lender holds money for property taxes and homeowners insurance. Part of monthly mortgage payment goes into escrow. Lender pays these bills when due. Prevents missed tax/insurance payments. VA loans can waive escrow if you have 10%+ equity, but most lenders require it initially.
Nevada Example: $3,000 annual Clark County property tax + $1,800 insurance = $400/month added to mortgage payment and held in escrow.
One-time VA charge to help offset program costs. Percentage of loan amount: 2.15% first use $0 down, 1.25% with 5%+ down, 3.3% subsequent use. Can be rolled into loan. Veterans with ANY service-connected disability rating are exempt (massive savings). National Guard/Reserves pay 0.15% more.
Nevada Example: $500K Reno purchase, first VA loan = $10,750 funding fee. If 10% disabled = $0 fee (save $10,750).
Loan with interest rate that never changes. Most VA loans are 30-year fixed. Provides payment stability. Popular because monthly payment stays same for 30 years (except tax/insurance changes). Also available in 15, 20, 25-year terms. Lower rates than adjustable.
Nevada Example: $400K VA loan at 6.5% fixed = $2,528/month P&I for all 360 payments - never changes.
VA streamline refinance to lower your rate on existing VA loan. No appraisal, minimal documentation, no income verification needed. Must result in lower payment or switch from ARM to fixed. Funding fee only 0.5%. Fastest, easiest VA refinance option. Also called "VA Streamline."
Nevada Example: Las Vegas veteran with 7% VA loan can IRRRL to 6% in 2-3 weeks with no appraisal, saving $300/month on $400K balance.
Annual cost of borrowing money, expressed as percentage. Determines your monthly payment amount. VA loan rates typically 0.25-0.5% lower than conventional. Rates change daily based on market conditions, credit score, loan amount, and property location. Lock rate when favorable.
Nevada Example: 6.5% vs 7.0% on $500K = $3,160 vs $3,327/month - $167/month difference ($60,120 over 30 years).
VA health/safety standards property must meet. Includes: safe water/sewer, working HVAC, structurally sound, lead-based paint disclosure, no wood-destroying insects, safe access. More strict than conventional. Protects veteran from buying defective property. Issues must be fixed before closing.
Nevada Example: Henderson home with broken AC in summer fails MPR - seller must repair before VA loan can close.
You must live in the home as primary residence. Must move in within 60 days of closing and live there at least 12 months. Can't use VA loan for pure investment properties. Can rent rooms or units in multi-family (2-4 units) while occupying one. After 12 months, can rent entire property and keep VA loan.
Nevada Example: Reno veteran buys duplex with VA loan, lives in one unit, rents the other. After 1 year, PCS to California, rents both units.
Pre-qualification: quick estimate based on stated info, not verified. Pre-approval: lender verifies income, credit, assets, issues conditional approval letter. Pre-approval is MUCH stronger for Nevada's competitive market. Shows seller you're serious, ready buyer. Required to make offers in many cases.
Nevada Example: Las Vegas veteran with VA pre-approval letter beats 5 other offers on $550K home because seller knows financing is solid.
Money left over each month after paying all debts and living expenses. VA's unique requirement alongside DTI. Varies by family size and region. Nevada is West region with higher requirements. More important than DTI for VA loans. Ensures you can afford the mortgage AND living expenses comfortably.
Nevada Example: Family of 4 in Las Vegas needs $1,117/month residual income. Earn $7,000, debts $3,500, taxes $1,500 = $2,000 residual ✓ approved.
Common questions about VA loan terminology for Nevada veterans
Now that you understand VA loan terminology, let's get you pre-approved in 24 hours. Nevada veterans trust us for transparent guidance and fast closings.