It is a guarantee offered by the U.S Veterans Administration to lenders who make qualified mortgage loans t eligible veterans of the U.S. Armed Forces and their unmarried surviving spouses. What is it?
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A. B. C. D.C
The correct answer is C. VA loan guarantee.
A VA loan guarantee is a benefit provided by the U.S. Department of Veterans Affairs (VA) to eligible veterans of the U.S. Armed Forces and their unmarried surviving spouses. It is a guarantee that the VA provides to lenders who make qualified mortgage loans to eligible veterans, which protects the lender against loss if the borrower defaults on the loan.
The VA loan guarantee program was created as part of the Servicemen's Readjustment Act of 1944, also known as the GI Bill of Rights. The program is designed to help eligible veterans buy, build, or improve homes by offering favorable loan terms and lower interest rates than conventional mortgages.
To be eligible for a VA loan, a borrower must be a veteran of the U.S. Armed Forces, active duty service member, or a surviving spouse of a veteran who died while on active duty or as a result of a service-related injury. The borrower must also meet certain credit and income requirements.
The VA loan guarantee is not a loan itself, but rather a promise that the VA will reimburse the lender for a portion of the loan if the borrower defaults. This allows lenders to offer more favorable terms and lower interest rates to eligible borrowers.
In summary, a VA loan guarantee is a benefit provided by the U.S. Department of Veterans Affairs to eligible veterans and their surviving spouses that guarantees lenders against losses if the borrower defaults on a qualified mortgage loan. It is designed to help eligible veterans and their families buy, build, or improve homes by offering more favorable loan terms and lower interest rates than conventional mortgages.