Under the Cal-VET home loan program, how is property title held during the repayment period, and what instrument conveys the veteran's interest?
Correct Answer
B) The California Department of Veterans Affairs holds legal title, and the veteran holds equitable title through a land contract
The Cal-VET program operates as a land contract (contract of sale) rather than a conventional mortgage. The California Department of Veterans Affairs purchases the property and retains legal title throughout the loan term. The veteran receives equitable title, takes possession, and makes installment payments. Legal title transfers to the veteran only upon full repayment of the loan, as governed by the California Military and Veterans Code §987 et seq. This structure distinguishes Cal-VET from standard VA-guaranteed loans, where the veteran holds legal title from closing.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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