Finance
A Minnesota homebuyer is comparing mortgage options. Which loan type requires NO down payment from qualifying veterans?
AFHA loan
BUSDA loan
CVA loan✓ Correct
DConventional loan
Explanation
VA (Veterans Affairs) loans allow eligible veterans, active duty service members, and surviving spouses to purchase homes with no down payment. Both VA loans and USDA loans can offer zero down payment, but VA loans are specifically for military personnel.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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