Alabama Real Estate Practice Exam

Is there a prepayment penalty for VA-insured loans?

1. Yes

2. No

3. Yes, in the first 5 years

4. Only for nonconforming loans

The correct answer is: No

VA-insured loans do not have prepayment penalties. This is part of the benefits provided by the VA to assist veterans and service members in becoming homeowners. Option A is incorrect because the VA does not require prepayment penalties on their loans. Option C is incorrect because the VA also does not impose a prepayment penalty within the first 5 years of the loan. Option D is incorrect because whether or not the loan is conforming or nonconforming does not have any impact on the prepayment penalty for VA-insured loans.