Finance
A VA loan is guaranteed by the Department of Veterans Affairs, which means:
AThe VA sets the purchase price of the home
BThe VA guarantees repayment of a portion of the loan to the lender if the borrower defaults, reducing the lender's risk✓ Correct
CVeterans do not have to repay VA loans
DVA loans are only available for new construction
Explanation
The VA guarantees a portion of the loan to the lender, reducing the lender's risk. This allows eligible veterans, active duty service members, and surviving spouses to obtain loans with no down payment, no PMI, and competitive interest rates. The veteran is still responsible for repaying the loan.
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