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Unformatted text preview: draw system, with the construction period ordinarily nine months, followed by 29–year/3–month amortization. ADVANTAGES AND DISADVANTAGES OF CAL–VET LOANS
The main advantages of the Cal–Vet loan are its relatively low interest rate; inexpensive life, fire, and disaster (flood, quake) insurance; and low closing costs. Disadvantages include lack of refinancings and occasional shortage of available funds for the program. For unmarried couples, another disadvantage might be that Cal–Vet can refuse to allow assignment of the veteran's contract of sale to the couple as joint tenants. Table below compares the different types of government–backed loans. Figure 5-1: Comparison of Government–Backed Loans (as of January 2002). FEATURE Purpose of loan Eligibility Expiration of eligibility
5-48 FHA 1–4 units U.S. resident Indefinite DVA 1–4 units U.S. veteran Indefinite CAL–VET Single dwellings, condominiums Qualified veteran Must apply within 30 years from date of Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 5: GOVERNMENT PARTICIPATION & BACKED LOANS
Maximum purchase price Maximum loan None Varies by counties 261,609 334,863 404,724 502,990 Minimum 3% None None by DVA; lenders limit loan amount None, but limited to CRV 30 years Allowed with limitations Fixed None discharge None $250,000 for homes $300,000 for farms Down payment 2% to 3% 30 years Allowed with limitations Variable rate None Maximum term 30 years Secondary financing Allowed with limitations Interest rate Fixed Prepayment penalty None For more information on Cal–Vets, please visit their web-site www.cdva.ca.gov STATE AND LOCAL REGULATIONS
In addition to direct government involvement in real estate finance, mostly at the federal level, there are state and local agencies and programs that have important direct and indirect influence. STATE FINANCIAL AGENCIES
These enforce and are regulated by the laws pertaining to California licensed savings and loan associations, banks, insura...
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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.
- Spring '10