A veteran with a 30% service-connected disability rating is purchasing a second home as an investment property. How does the VA funding fee apply in this situation?
Correct Answer
C) VA loans cannot be used for investment properties
VA loans can only be used for primary residences. Veterans cannot use VA loan benefits for investment properties or vacation homes, regardless of their disability rating or entitlement status.
Why This Is the Correct Answer
VA loans can only be used for primary residences. Veterans cannot use VA loan benefits for investment properties or vacation homes, regardless of their disability rating or entitlement status.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
People Also Study
Federal Mortgage-Related Laws
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A borrower has a 5/1 ARM with an initial rate of 3.5%. The loan uses the 1-year Treasury index, which is currently at 2.0%, and has a margin of 2.75%. What will the borrower's new interest rate be at the first adjustment, assuming no rate caps apply?
Next Question
A manufactured home borrower wants to obtain FHA financing. The home was built in 1995 and will be placed on a permanent foundation on land the borrower owns. What additional requirement must be met?