SC VA loan glossary
Mike Certo · Cornerstone First Mortgage · NMLS #260555 ·
VA loans + SC-specific Veteran programs have a vocabulary of their own. This glossary collects the terms Veterans actually encounter, plain-English definitions, and SC-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 some DPA programs to determine eligibility. AMI varies by county — check HUD's income limits database for your specific area. National programs like Chenoa Fund and Arrive Home have no income limit.
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 SC market.
B
BAH (Basic Allowance for Housing) — Monthly housing stipend paid to active-duty service members. Varies by base + rank + dependent status. 2026 Fort Jackson E-5 with dependents BAH — run your exact number in the calculatorBAH calculator. 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 special assessments — Some SC master-planned communities (Nexton, Cane Bay) carry 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 SC 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 — South Carolina is a common-law, equitable-distribution state (not a community-property state). Marital property is divided fairly rather than automatically 50/50, which affects how VA loans are titled and how divorce and estate planning interact with the home.
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 SC baseline: $832,750 statewide.
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% in SC = full property tax exemption under SC Code §12-37-220.
DPA (Down Payment Assistance) — Programs that provide grants or forgivable seconds to help with down payment + closing costs. National programs available in South Carolina: Chenoa Fund, Arrive Home, Essex/NHF Sapphire. 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 SC 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 SC VA loans use escrow.
F
FAIR Plan (SC FAIR Plan) — Insurance of last resort for homes that can't get standard market insurance — typically high-hurricane and flood-risk SC properties. More expensive, more limited coverage.
FHFA limit — Federal Housing Finance Agency conforming loan limit. 2026 baseline: $832,750 in every SC county.
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
Homestead exemption (disabled Veteran) — S.C. Code §12-37-220 gives Veterans with a total, permanent, service-connected disability a complete property-tax exemption on the home and land up to five acres, with no value cap — plus two private vehicles. Unremarried surviving spouses keep it. There is no partial-rating benefit. Full guide.
HOA (Homeowners Association) — Community association charging monthly/annual fees for shared amenities + maintenance. Common in SC master-planned communities. Affects VA DTI calculation.
Arrive Home — National DPA program available in all states. Up to 5% of loan amount, forgivable after 3 years of occupancy. VA compatible, no income limits, 620+ credit. VA + DPA stacker guide.
Chenoa Fund — National DPA program available in all states. Up to 5% of loan amount as a forgivable grant or repayable second. VA compatible, no income limits, 620+ credit. VA + DPA stacker guide.
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 SC). 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 SC. 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).
Fort Jackson — Fort Jackson, Columbia, SC. Largest Army training base in the U.S. — produces roughly 50% of all Army basic combat training graduates annually. Richland County, SC. Base hub pages.
M
MCC (Mortgage Credit Certificate) — Federal tax credit for portion of mortgage interest paid. SC Housing Authority administers. Can stack with VA + DPA.
MHA (Military Housing Area) — Geographic area used to set BAH rates. Fort Jackson falls in Columbia MHA; Shaw AFB falls in Sumter MHA.
MPR (Minimum Property Requirements) — VA's property standards. Working A/C, sound roof, adequate water/sewer, no major safety issues, defensible space in hurricane and flood 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.
Origination fee — Lender fee for processing the loan. VA caps at 1% of loan amount.
P
PCS (Permanent Change of Station) — Military relocation between duty stations. 60-day window from arrival for VA primary-residence occupancy. See the first-time VA buyer guide.
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 SC 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 SC baseline: $832,750.
W
Wind/hail deductible — Coastal SC homeowner policies typically carry a separate named-storm or wind/hail deductible (often 1-5% of dwelling coverage instead of a flat amount). Budget for it when comparing quotes in Charleston, Beaufort, or Myrtle Beach. Hurricane and flood guide.
WUI (Wildland-Urban Interface) — Areas where development meets wildland. Subject to defensible-space requirements; mostly SC mountain communities.
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 SC Veterans ask new questions.