The VA benefit from the department of Veteran's Affairs for a veteran approved home loan guarantees that:

The VA benefit from the department of Veteran's Affairs for a veteran approved home loan guarantees that:

• A. the loan, or a portion of it, made by an approved lending institution will be paid.
• B. the borrower receives a grant toward closing costs.
• C. the interest rate is fixed for the life of the loan.
• D. the lender is insured against all losses.

Answer: (A)

The main idea is that the VA loan guarantee reduces the lender’s risk by backing part of the loan. When a veteran uses a VA-approved loan, the VA promises to pay the lender for the portion of the loan that is guaranteed if the borrower defaults. This is what makes lenders willing to offer favorable terms, like no down payment and often no private mortgage insurance. That’s why the statement about the VA benefit paying the loan or a portion of it is the correct description. It’s not a grant to the borrower toward closing costs, nor does the VA fix the interest rate for the life of the loan, and the guarantee doesn’t insure the lender against all losses—only a portion.

The main idea is that the VA loan guarantee reduces the lender’s risk by backing part of the loan. When a veteran uses a VA-approved loan, the VA promises to pay the lender for the portion of the loan that is guaranteed if the borrower defaults. This is what makes lenders willing to offer favorable terms, like no down payment and often no private mortgage insurance.

That’s why the statement about the VA benefit paying the loan or a portion of it is the correct description. It’s not a grant to the borrower toward closing costs, nor does the VA fix the interest rate for the life of the loan, and the guarantee doesn’t insure the lender against all losses—only a portion.