Final answer:
A veteran may not be able to use VA financing to buy a home when the owners will not accept less than a certain price. The veteran may have to pay the difference out of pocket to meet the minimum price requirement. The VA loan program does not always provide 100% financing.
Step-by-step explanation:
When using VA financing to buy a home, the veteran can typically borrow up to the appraised value of the property, as long as it does not exceed the maximum loan limit set by the VA. In this case, the Certificate of Reasonable Value indicates the property is worth $110,000, which is below the minimum price the owners will accept ($120,000). Therefore, the veteran may not be able to use VA financing to buy this particular home unless they are willing to pay the difference out of pocket.
It's important to note that the VA loan program does not provide 100% financing for all cases. The loan amount is based on the lesser of the appraised value or the purchase price, and the borrower may need to make a down payment or cover any difference between the loan amount and the purchase price.
For example, if the veteran wanted to buy a different property with an agreed purchase price of $120,000 and the Certificate of Reasonable Value indicated a value of $110,000, they could potentially use VA financing by making a $10,000 down payment (the difference between the purchase price and the appraised value).