California Real Estate Practice Exam

What is the cost to the borrower for a VA loan guarantee of 100% of the property's estimated value?

1. 3.00%

2. 2.15%

3. 1.75%

4. 2.75%

The correct answer is: 2.15%

The cost to the borrower for a VA loan guarantee of 100% of the property's estimated value is 2.15%. This is known as the "funding fee" and is applied to the loan to help reduce the overall cost of the loan for the government. Option A, 3.00%, is incorrect because it is typically the funding fee for regular armed forces borrowers with a zero down payment. Option C, 1.75%, is incorrect because it is typically the funding fee for National Guard and Reserve soldiers. Option D, 2.75%, is incorrect because it is typically the funding fee for regular armed forces borrowers with a down payment of at least 10%. Therefore, B is the correct answer as it is the funding fee for regular armed forces borrowers with a zero down payment.