Question 66

A veteran can buy the house after a $5000 down payment.

The veteran can utilize the $5,000 cash as a down payment to secure a VA loan for the home priced at $90,000.

A) buy the house after a $5000 down payment

This option is correct because the VA loan program allows veterans to purchase homes with little to no down payment. In this case, using the $5,000 as a down payment is feasible, allowing the veteran to proceed with the purchase of the $90,000 home.

B) not secure a VA loan because the limit is $75000

This option is incorrect as it misrepresents VA loan limits. The VA loan program does not have a strict cap of $75,000; instead, it allows veterans to borrow amounts that exceed this limit based on their entitlement, making it possible to secure a loan for a $90,000 home.

C) buy only if price is reduced to $85000

This option is incorrect because there is no requirement for the home price to be reduced to $85,000 for the veteran to purchase it. The veteran can use the available funds and VA loan benefits to buy the home at its current price of $90,000.

D) buy only if the seller takes a $5000 second mortgage

This option is incorrect as it suggests an unnecessary condition for the purchase. The veteran can proceed with the purchase using the $5,000 down payment without requiring the seller to agree to a second mortgage.

Conclusion

The correct answer is affirmed by the flexibility of the VA loan program, which allows veterans to make home purchases with minimal down payments. Options B, C, and D do not align with the policies of VA loans or the veteran's financial capability, thus confirming that option A is the only viable choice.