FHA or VA Loan?
Introduction: FHA loans offer primary real estate lenders insurance against default on new home purchases while VA loans offer these same lenders a government guaranty. FHA and VA loans have different qualifying criteria and are often a good option for certain clients. In this assignment, you will decide which loan type is best based on the following scenario.
The following Course Outcome is assessed in this assignment:
MT431-5: Determine an appropriate client property that qualifies for an FHA or VA loan.
Scenario: Calandra is a veteran who has been employed with a technology company for the last seven years. In her newest job with this company, she is required to spend six months a year in Seattle, Washington, and spend the other six months at the companys Miami, Florida headquarters. Recently she purchased a two-bedroom condo in Miami using her VA benefits and now wants to purchase a small two-bedroom, 2-bath condo as a place to live when she is in Seattle. She wants the condo to be located close to downtown so she can use public transportation. Financially, Calandra qualifies under both the payment ratio and debt ratio for the new loan, has a FICO score of 620, but she does not have a lot of money to put down on the new condo in Seattle.
Checklist:
Research the current loan limits using the Internet.
Search a well-known real estate website like realtor.com or zillow.com etc., and find a property that fits the veterans criteria and for which she will qualify for an FHA or VA loan.
Describe the property you find and evaluate the criteria by which the property must qualify in order to get the FHA or VA loan you determine she would qualify for.
Determine what type of government sponsored low down payment loan she would qualify for.
Explain why other low down payment loans would not work for her.
Determine what her down payment would need to be for the loan program you recommend for her (show calculations).
Describe the guidelines that qualify her for the loan you are recommending.
Access the Assignment grading rubric located in the Course Resources area.
