The VA Loan, Explained for Pennsylvania
Program and regulatory figures verified October 10, 2026. Details change; confirm your scenario with us.
The product is federal and the same in every state. What makes Pennsylvania different is a tax exemption worth more than anything the loan itself provides.
What a VA loan is
A mortgage made by a private lender and partially guaranteed by the Department of Veterans Affairs. The guaranty is what lets a lender offer terms a conventional loan cannot:
- No down payment for a borrower with full entitlement.
- No monthly mortgage insurance, unlike a low-deposit conventional or FHA loan.
- A one-off funding fee instead, waived entirely for five categories of veteran.
- A residual income test alongside debt-to-income.
★ We are a private lender and we are not affiliated with the VA or any government agency. The VA decides your entitlement and your rating; we underwrite the loan.
★★ Pennsylvania thing zero: understand entitlement first
Because it decides whether a loan limit exists for you at all. The VA: with full entitlement "You don't have a loan limit (as long as you can afford the loan amount and the property appraisal supports the purchase price of the home)."
★ With remaining entitlement the county figure is used to work out whether there is enough left for a 25% guaranty, and a down payment can reappear. How to tell which you have · The county figures.
★★★ Pennsylvania thing one: the property-tax exemption
A full real estate tax exemption on a principal dwelling, for a veteran with a 100% permanent service-connected rating or TDIU, plus wartime service, Commonwealth residency, qualifying ownership and financial need against a $114,637 presumption.
★★ The level rose on 1 January 2025 and the Commission says previously denied applicants should reapply. Every criterion.
★★ Pennsylvania thing two: the wartime condition
The exemption requires "service during a period of war". A 100%-rated peacetime veteran does not meet that limb, while expeditionary medals can establish wartime service for someone who thought they did not qualify.
★ Vietnam-era veterans are 35.70% of the state's veterans, the largest cohort, and are inside it. The detail.
★★ Pennsylvania thing three: the transfer tax
1% Commonwealth statewide, and 4.578% total in Philadelphia. No VA benefit covers it, and the Department of Revenue says grantor and grantee are "jointly and severally liable".
★★ So "nothing down" is not "nothing at closing", and in Philadelphia the gap is about $17,834 at typical value. The arithmetic.
★★★ Put together
A qualifying Pennsylvania veteran can reach zero on the down payment, zero on the funding fee and zero on property tax, three charges, three authorities, none of which talks to the others. How the stack works.
★ What a VA loan is not
- Not a grant, and not down payment assistance.
- Not automatic, the VA is explicit that the lender must still approve you.
- Not a rate you can look up here. We publish none; pricing is file-specific.
- Not a product only for first-time buyers, and not one you can use only once.
- Not connected to the Pennsylvania exemption, which is a separate application to a county office.
The sequence that works
- Get your COE and know your entitlement.
- Check your funding-fee exemption status, a memorandum rating before closing counts.
- ★ Start the county tax exemption application if you may qualify. It is slow and separate.
- Budget the transfer tax in cash.
- Then talk to us about the loan.
Mike Certo, NMLS #260555, Cornerstone First Mortgage NMLS #173855. (480) 296-6513 · mcerto@cfmtg.com.
Frequently asked questions
How does a VA loan work in Pennsylvania?
The same way it works federally: a private lender makes the loan and the Department of Veterans Affairs partially guarantees it, which allows no down payment for a borrower with full entitlement and no monthly mortgage insurance, with a one-off funding fee instead. What differs in Pennsylvania is the state Disabled Veterans' Real Estate Tax Exemption and the realty transfer tax.What should a Pennsylvania veteran know before buying?
Three state-specific things: that Pennsylvania offers a full real estate tax exemption on a principal dwelling for qualifying disabled veterans with wartime service; that the wartime-service condition excludes some 100-percent-rated peacetime veterans; and that the realty transfer tax, 4.578 percent in Philadelphia, is cash no VA benefit covers.Is a VA loan only for first-time buyers?
No. Entitlement can be used more than once and can be restored, though a subsequent use carries a higher funding fee at low down payments: 3.3 percent under 5 percent down against 2.15 percent for first use.Is Cornerstone First Mortgage part of the VA?
No. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. The VA determines entitlement, disability ratings and funding-fee exemptions.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about VA home loan financing, not a loan commitment and not legal, tax or financial advice. Cornerstone First Mortgage is a private lender and is not affiliated with, endorsed by or acting on behalf of the U.S. Department of Veterans Affairs or any government agency. VA entitlement, funding-fee exemption and disability ratings are determined by the U.S. Department of Veterans Affairs. The Pennsylvania Disabled Veterans' Real Estate Tax Exemption is administered by the Pennsylvania State Veterans' Commission through each county Director of Veterans Affairs, not by Cornerstone; its criteria and income thresholds are set by the Commonwealth and change. Figures here carry the date we verified them against primary sources. All loans are subject to borrower, property and program qualification.