Which program is guaranteed by the U.S. Department of Veterans Affairs to lenders who make qualified loans to eligible veterans of the U.S. Armed Forces and their unmarried surviving spouses?

Which program is guaranteed by the U.S. Department of Veterans Affairs to lenders who make qualified loans to eligible veterans of the U.S. Armed Forces and their unmarried surviving spouses?

• A. FHA mortgage insurance
• B. VA loan guarantee
• C. Conventional mortgage
• D. Fixed-rate mortgage

Answer: (B)

The government-backed guarantee to lenders on loans to eligible veterans and their unmarried surviving spouses is the VA loan guarantee. The Department of Veterans Affairs does not lend the money itself; instead, it guarantees a portion of the loan, reducing the lender’s risk if the borrower defaults. That safety net allows lenders to offer favorable terms—such as little or no down payment and often no private mortgage insurance—to qualified veterans. This contrasts with FHA mortgage insurance, which is a different program, or with conventional or fixed-rate mortgages, which are not government-guaranteed in the same way.

The government-backed guarantee to lenders on loans to eligible veterans and their unmarried surviving spouses is the VA loan guarantee. The Department of Veterans Affairs does not lend the money itself; instead, it guarantees a portion of the loan, reducing the lender’s risk if the borrower defaults. That safety net allows lenders to offer favorable terms—such as little or no down payment and often no private mortgage insurance—to qualified veterans. This contrasts with FHA mortgage insurance, which is a different program, or with conventional or fixed-rate mortgages, which are not government-guaranteed in the same way.