For what purpose can a VA-guaranteed loan NOT be used?

For what purpose can a VA-guaranteed loan NOT be used?

• A. To buy an existing home
• B. To buy a lot for a mobile home
• C. To build an apartment building solely for income
• D. To buy a farm with a farmhouse

Answer: (C)

A VA-guaranteed loan is primarily designed to assist veterans in obtaining home loans and is typically used for purchasing or refinancing a home that will be occupied by the veteran and their family. This includes buying an existing home, purchasing lots for mobile homes, or buying a farm with a farmhouse, all of which are eligible uses under the program’s guidelines. The key aspect to understand is that VA loans are intended to promote home ownership rather than investment properties that generate income. Building an apartment building solely for income is not within the scope of what the VA loan program supports. This restriction exists because the VA loan program focuses on providing housing for veterans rather than facilitating investment in rental properties. Therefore, option C correctly identifies a purpose that is not allowed for VA-guaranteed loans.

A VA-guaranteed loan is primarily designed to assist veterans in obtaining home loans and is typically used for purchasing or refinancing a home that will be occupied by the veteran and their family. This includes buying an existing home, purchasing lots for mobile homes, or buying a farm with a farmhouse, all of which are eligible uses under the program’s guidelines.

The key aspect to understand is that VA loans are intended to promote home ownership rather than investment properties that generate income. Building an apartment building solely for income is not within the scope of what the VA loan program supports. This restriction exists because the VA loan program focuses on providing housing for veterans rather than facilitating investment in rental properties. Therefore, option C correctly identifies a purpose that is not allowed for VA-guaranteed loans.