California Real Estate Practice Exam

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Which of the following would issue a CRV when asked to approve a new loan?

Department of Veterans Affairs
FHA
Savings bank
VA

The correct answer is: Department of Veterans Affairs

The correct answer is indeed the Department of Veterans Affairs (VA). The VA is responsible for issuing a Certificate of Reasonable Value (CRV) when a veteran applies for a loan backed by the VA. This certificate is an assessment of the property’s value, helping to determine the maximum loan amount that the VA will guarantee. The VA issues a CRV to ensure that loan amounts do not exceed the actual value of the property, protecting both the veteran and the lender by preventing overfinancing. This process is a critical part of the VA loan application process, as it aligns the loan amount with the property's fair market value. The other options, such as the FHA and savings banks, do not issue a CRV; the FHA has its own appraisals and valuation processes specific to its loan products, while a savings bank may provide residential loans but does not have a mechanism like the CRV associated with VA loans.