PSI Virginia Real Estate Practice Exam

Which financing option is available without a down payment for eligible veterans?

1. FHA insured loans

2. USDA/rural loans

3. VA guaranteed loans

4. Conventional loans

The correct answer is: VA guaranteed loans

The financing option available without a down payment for eligible veterans is VA guaranteed loans. This program is specifically designed to provide veterans, active-duty service members, and certain members of the National Guard and Reserves the opportunity to purchase homes without the requirement of a down payment. VA loans are backed by the U.S. Department of Veterans Affairs and they allow for competitive interest rates and favorable loan terms. One of the most significant benefits is the ability to finance 100% of the purchase price of the home, which is particularly advantageous for veterans who may not have substantial savings for a down payment. In contrast, other options mentioned typically do have varying requirements for down payments. For instance, FHA insured loans usually require a minimum down payment of 3.5% for qualifying borrowers. USDA/rural loans also often require a small down payment, depending on the circumstances, although they can offer zero-down financing for those who meet specific income and location criteria. Conventional loans often come with minimum down payment requirements as well, usually starting around 3% to 5%, depending on the lender and the borrower's financial profile. Thus, VA guaranteed loans stand out as the most beneficial financing choice for eligible veterans seeking to purchase a home without a down payment.