Tom is a veteran looking to purchase his first home in New York using his VA loan benefit. He is considering both a condominium and a cooperative apartment in the same building. Which option can he finance with his VA loan?
Correct Answer
D) Only the condominium, because VA loans require real property ownership
VA loans can only be used for real property purchases. Condominiums involve real property ownership (fee simple with a deed), making them eligible for VA financing. Cooperatives involve personal property (shares in corporation), which makes them ineligible for VA loans regardless of other factors.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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