Final answer:
When a veteran uses a VA guaranteed loan but the home's price exceeds the CRV, they may need to cover the gap out-of-pocket or negotiate a reduced price. However, historic redlining and restrictive covenants often made it challenging for nonwhite veterans to utilize these benefits.
Step-by-step explanation:
If a veteran wants to finance a house using a VA guaranteed loan, but the selling price is greater than the Certificate of Reasonable Value (CRV), the veteran may have to pay the difference out-of-pocket or negotiate a lower selling price. The VA guaranteed loan program was created as part of the GI Bill and aims to help veterans purchase homes by providing a federal guarantee to lenders, reducing the risk of the loan. Despite the intention of the GI Bill to provide equal benefits to all veterans, due to the social and racial climate of the 1940s, nonwhite veterans often encountered difficulties when trying to use their benefits, facing the same redlining and restrictive covenants that affected many Americans seeking homeownership during the New Deal era.