real estate finance - full book (500 pgs)

Dva itself does not prescribe a maximum but lenders

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Unformatted text preview: ble on its original terms. Lower–than–market interest rates. Appraisal – DVA appraisals, known as Certificates of Reasonable Value (CRVs), are made by independent professional appraisers who work for the DVA on a fee basis. Appraisals are made to protect the veteran buyer. The DVA informs the buyer what it thinks is a reasonable value for the property. The buyer is allowed to pay more than that value if he or she agrees. This is protection for a buyer who is not aware of property values. However, the buyer can back out only if the appraisal is ordered after the purchase contract is executed. DISADVANTAGES OF DVA LOANS DVA loans have basically the same disadvantages as FHA loans. Qualifying – Certificate of Eligibility. The veteran must have (or obtain) a Certificate of Eligibility from the USDVA. This establishes the amount of the guarantee entitlement, whether full or partial. Discount Points – Lenders are not permitted to charge discount points to “GI loan” borrowers of purchase money loans. Therefore, a seller is Dynasty School ( 5-43 REAL ESTATE FINANCE required to pay the discount points for a buyer financing the purchase with a GI loan. Some sellers are reluctant to pay the necessary discount points, especially in an active market with many qualified buyers. Employment – Two years employment in the same field, or employment in the field of a college degree or specialized training. Special consideration may be given to a veteran recently discharged with very little civilian employment experience. Bankruptcy – Consideration is given case by case for veterans who have experienced bankruptcy and since reestablished a credit record. Debts – Payment obligations that will continue for six months or more will be considered. Five percent of credit card balances will be considered monthly payment obligations. Lengthy Processing Time – Except for loans made by “supervised lenders” (banks, S&Ls, and life insurance companies) which can make automatically guaranteed loans, you run into the same problem with the DVA and the FHA. Processing time, inflexibility, paperwork, and the usual problems...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.

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