Question

An eligible veteran made a purchase offer of 130,000 on a home he wants to finance with a VA-guaranteed loan. Four weeks after the offer was accepted, a certificate of reasonable value (CRV) for127,000 was issued for the property. In this situation, the veteran could not do which of the following?

1) Withdraw from the transaction without penalty
2) Purchase the property with a $3,000 cash down payment
3) Negotiate with the seller to reduce the price by $3,000
4) Borrow the $3,000 for the cash down payment

Answer 1

A veteran cannot borrow the $3,000 for a cash down payment when the CRV issued is $3,000 less than the offered price on a VA-guaranteed loan; they can withdraw, negotiate, or pay in cash if able.

Step-by-step explanation:

In the scenario where a veteran made a purchase offer on a home for $130,000, which was financed with a VA-guaranteed loan, and a certificate of reasonable value (CRV) was issued at $127,000, there are several actions that the veteran could consider. However, the one action the veteran could not do is borrow the $3,000 for the cash down payment to make up the difference between the offer and the CRV value, as VA loans typically do not allow borrowers to take additional loans for down payments to meet the CRV. The veteran is free to withdraw from the transaction without penalty, negotiate with the seller to reduce the price, or make a cash down payment if they have the funds available. VA loans are meant to offer veterans a way to purchase a home with no down payments and favorable terms; hence, expecting a veteran to borrow more would defeat this purpose.