VA Loans for Michigan Realtors: Entitlement, Funding Fees, Appraisals, and Seller Concessions

VA-backed purchase loans come up often in Michigan, especially with buyers who have served, are serving, or are eligible surviving spouses. A VA offer is not automatically weaker or stronger than a conventional or FHA offer. Strength depends on the buyer’s file, the property, the contract terms, and underwriting. This article is a briefing for Realtors. It is educational. It is not a determination of entitlement, an appraisal, a property-eligibility finding, or a commitment to lend.

A Certificate of Eligibility, often called a COE, is the starting document. The COE tells a lender whether the Veteran, service member, or eligible surviving spouse has remaining entitlement and whether a prior VA loan is still outstanding. Buyers request a COE through VA or, in many cases, the lender can retrieve it with authorization. If a buyer mentions military service, the useful next step is to connect them with a loan officer who can confirm eligibility rather than trying to decide it from memory in a showing.

Entitlement is the amount of guaranty VA can attach to a loan. With full entitlement, VA does not set a county loan limit for the borrower. The practical limit is the lender’s and investor’s willingness to make the loan, the appraised value, and the underwriting of the file. With reduced or remaining entitlement — often because another VA loan is still outstanding — a county conforming limit can come back into the picture and a down payment may be required. Do not tell a buyer they “have full entitlement” until a current COE says so. Entitlement questions belong with the loan officer and VA, not in a listing remark.

Most VA-backed purchase loans do not require a down payment when the borrower has full entitlement and the contract price is not higher than the appraised value. That is VA’s published framework, not a promise that a particular file will be approved at a particular price. A down payment can still appear when entitlement is reduced, when a lender overlay requires one, or when the price is above the appraised value.

Instead of monthly mortgage insurance, most borrowers pay a one-time VA funding fee. The fee is a percentage of the loan amount, not of the purchase price, and it can be paid at closing or financed into the loan. VA’s current purchase and construction table, effective April 7, 2023, and still published on VA’s funding-fee page as of the retrieval date in the sources below, is shown in the table below.

Those figures come from VA’s own table, last updated on the consumer page on October 5, 2026, and from VA Circular 26-23-6 Exhibit B for loan closings on or after April 7, 2023 and prior to November 14, 2031. Confirm the current table on VA’s site before you cite a percentage in a live conversation. Some borrowers are exempt, including many who receive or are eligible for VA disability compensation, certain surviving spouses who receive Dependency and Indemnity Compensation, service members with a qualifying proposed or memorandum rating before closing, and active-duty service members who present evidence of a Purple Heart on or before closing. Exemption is fact-specific. Do not assume it, and do not advertise an exemption you have not confirmed.

VA appraisals and Minimum Property Requirements, or MPRs, are a frequent source of listing questions. MPRs are intended to help ensure a property is safe, structurally sound, and sanitary. They are in VA Lender’s Handbook (VA Pamphlet 26-7), Chapter 12. Cosmetic items and minor deferred maintenance are not automatically required repairs. The appraiser and the lender decide what must be addressed. If a value comes in below the contract price, VA has a Tidewater procedure, described in Chapter 10, Topic 8, that can give a chance to submit additional market evidence before a low value is issued. That is not a promise the value will change.

Seller concessions on a VA-backed purchase are limited to 4 percent of the property’s reasonable value. Normal closing costs and market-appropriate discount points are generally excluded from that 4 percent cap. Credits that do count toward the cap can include things such as paying the funding fee, paying off certain buyer debts, or prepaying hazard insurance, depending on how the item is characterized. This is one of the most useful distinctions for a listing agent. A concession toward ordinary closing costs is not automatically the same thing as a 4 percent concession. Confirm the characterization with the loan officer before anyone treats a credit as “within VA’s 4 percent.” Unused credit typically cannot be taken as cash by the buyer.

For Michigan Realtors, two practical points recur. First, VA buyers purchase across Oakland, Macomb, and Wayne Counties and throughout the state; there is no special “VA neighborhood.” Second, property-condition conversations should stay humble. An older bungalow in a Detroit-area inner-ring suburb, a manufactured home, or a condominium may raise extra documentation or project-approval questions. None of that is an automatic denial, and none of it should be diagnosed from a hallway conversation.

What helps a VA file move: a current COE, early residual-income and occupancy conversations with the loan officer, realistic repair expectations, and offer terms that a listing agent can explain without overstating. What does not help: treating a VA offer as weaker by default, promising a funding-fee exemption, or treating a needed repair as if it will certainly be waived.

If you want to walk through a specific (non-identifying) scenario, schedule a Realtor strategy conversation with Shane. Buyers who are ready to start a file can also begin an application with Shane at Ease Mortgage through the lender’s application link. Education on this page is free and is not conditioned on a referral.

Educational only. Not a loan approval, a legal opinion, or a commitment to lend. Not all applicants will qualify.