Definition: The VA is the federal department that administers veterans’ benefits, including home-loan benefits for eligible borrowers. Under its loan-guaranty program, VA guarantees part of a loan made by a private lender.
Example
An eligible veteran obtains a VA-backed purchase loan from a private lender. VA’s guarantee helps protect the lender against covered loss.
Keep the distinction clear
Eligibility is not limited to veterans: qualifying service members and certain surviving spouses can also qualify. A VA guarantee does not erase the borrower’s repayment obligation or guarantee loan approval.
Related terms
Conventional Loan · Federal Housing Administration (FHA) · Mortgage
Keep studying
VA Loans: Entitlement, Loan Limits, and Down Payments
References: VA: Home loan guaranty program
Pronunciation (US): dee-PART-muhnt uhv VET-er-uhnz uh-FAIRZ; VA: vee-AY (capitals show stress)
Pronunciation reference: Merriam-Webster
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