VA loan glossary

Plain-language definitions of the terms you will see on a VA loan in Chicago. Each links to the guide that covers it in depth.

Jump to: A · B · C · D · E · F · I · L · M · N · P · R · S · T · V

A

Amendatory clause

A required VA contract clause that lets you cancel without losing earnest money if the price is higher than the VA appraised value. Read more

Attorney review

In Illinois, the five business days after an offer is accepted when each side’s attorney can propose changes or cancel. Read more

B

Basic entitlement

The first $36,000 of VA guaranty every eligible borrower has, applied to loans of $144,000 or less. Read more

Bonus entitlement

Additional VA guaranty for loans above $144,000, usually 25% of the loan amount. Read more

C

Cash-out refinance

A VA refinance that can replace any loan, VA or not, and let you take out equity. It needs a new appraisal. Read more

Certificate of Eligibility (COE)

VA’s proof that you qualify for the home loan benefit. It shows your entitlement and whether you are exempt from the funding fee. Read more

D

DD214

The military discharge document veterans use to request a COE. Read more

Debt-to-income ratio (DTI)

Monthly housing and debt payments divided by gross monthly income. VA uses 41% as a benchmark. Read more

Dependency and Indemnity Compensation (DIC)

A VA payment to eligible survivors. Spouses who receive it can get a COE and skip the funding fee. Read more

E

Equalized assessed value (EAV)

The value Cook County applies property tax rates to. Veteran exemptions are subtracted from it. Read more

F

Full entitlement

Having all of your VA benefit available. With full entitlement there is no VA loan limit. Read more

Funding fee

A one-time VA charge on most VA loans, from 0.5% to 3.3% of the loan. Veterans receiving disability compensation pay 0%. Read more

I

IRRRL

Interest Rate Reduction Refinance Loan, the VA streamline refinance. It has a 0.5% funding fee and usually no appraisal. Read more

L

Loan assumption

Taking over a seller’s existing VA loan, including its rate and balance, with servicer approval. The funding fee is 0.5%. Read more

M

Minimum property requirements (MPRs)

VA’s safety, soundness and sanitation standards that the appraiser checks. Read more

N

Notice of Value (NOV)

The VA document that states the home’s reasonable value after the appraisal. Read more

P

Partial claim

A VA foreclosure-prevention option, launched June 15, 2026, that pays missed payments as a no-payment second lien. Read more

Partial entitlement

Having part of your VA benefit tied up in another loan. Cook County’s $832,750 conforming limit sets your zero-down maximum. Read more

R

Release of liability

Approval that frees a seller from responsibility for a VA loan after a buyer assumes it. Read more

Residual income

Money left each month after the mortgage, debts and living costs. VA sets minimums by region and family size. Read more

S

Seller concession

Value a seller adds beyond normal closing costs, such as paying your funding fee. VA caps concessions at 4% of reasonable value. Read more

Specially Adapted Housing (SAH) grant

A VA grant of up to $126,526 in fiscal 2026 for veterans with certain severe disabilities to buy, build or adapt a home. Read more

Substitution of entitlement

When a veteran buyer assumes a VA loan and uses their own entitlement, restoring the seller’s. Read more

T

Tidewater

VA’s process that warns your lender when an appraisal will come in low and gives two business days to send comparable sales. Read more

V

VA-approved condo

A condominium project accepted by VA. You can use a VA loan only in an approved building. Read more

Sources

1. VA home loans, VA.gov
2. VA Lenders Handbook (M26-7)