Chapter 6.6 National Finance

Conventional mortgages usually require insurance by FHA. guarantee by VA. A larger down payment. A loan by FNMA.

A larger down payment.

What can the VA require a veteran do when obtaining a loan? Make the down payment directly to the VA Make a down payment in cash Make the veteran automatically assume liability for the loan Not allow the veteran to make prepayments on that amount

Make the veteran automatically assume liability for the loan

A veteran had a VA loan using his full entitlement. He allows another veteran to assume the loan without VA approval. Could he immediately get another VA loan? Yes, because another veteran assumed the loan. Yes, because he is no longer liable for the loan. No, because he is still liable for the loan. No, as he can NOT use VA eligibility more than once.

No, because he is still liable for the loan.

On a government backed loan, which of the following would be permitted concerning pre-payment penalties? An FHA loan with a maximum of a 2% pre-payment penalty of the outstanding loan balance On an FHA or VA loan as long as the pre-payment penalty did not exceed 2% of the original loan amount A VA loan may contain a maximum of a 3% pre-payment penalty on the loan balance at the time of payoff Prepayment penalties are not allowed, under any circumstances, on VA or FHA loans.

Prepayment penalties are not allowed, under any circumstances, on VA or FHA loans.

An FHA mortgage loan is obtained through which of the following? Qualified lending institutions Any government agency The Federal Housing Authority The Federal Deposit Insurance Corporation

Qualified lending institutions

If a Veteran wanted to buy a $60,000 house in a city with a population of 100,000 people, which of the following loans could he NOT apply for? VA loan FHA loan RECD loan Conventional loan

RECD loan

A borrower applied for a VA guaranteed first time mortgage for $50,000; however, the property appraised for $46,000. If the buyer still wanted to buy the property which could happen? The broker could write up a contract, different from the actual offer price, to take to the lender The VA could allow the borrower to make up the difference in cash The VA could make the borrower get a second mortgage for the difference The veteran could not get a VA loan because it appraised for over $35,000

The VA could allow the borrower to make up the difference in cash

A veteran desired a loan to buy a 200 acre residence. There are no VA lenders in the area. Which could happen? The VA could loan the money themselves. The VA cannot loan the money but the Federal National Mortgage Company will. You cannot get a VA loan for a farm. The VA can require local lenders to make the VA loan.

The VA could loan the money themselves.

What is the purpose of FHA? To loan money for first mortgages To loan money for second mortgages To act as an insurance company of first mortgages To loan money in areas of high risk

To act as an insurance company of first mortgages

In 1975 a veteran paid off his VA loan and sold his house. Would he be entitled to another VA loan? Yes, veterans can apply for more than one loan in their lifetime as long as the first is paid off. Yes, because he paid off the first loan and sold the mortgaged property. No, a veteran can only have one VA loan in his lifetime. No, because he is only entitled to one allotment in his lifetime even if he paid off his loan and sold the mortgaged property.

Yes, because he paid off the first loan and sold the mortgaged property.

Private mortgage insurance is associated with FHA loans. VA loans. conventional loans. RECD loans.

conventional loans.

Rural Economic and Community Development (RECD) loans are either made directly by RECD or made by a private lender with RECD guaranteeing a certain percentage. directly by RECD or made by a private lender with the FHA insuring a certain percentage. directly by RECD or made by a private lender with RECD insuring a certain percentage. directly by HUD or made by a private lender with HUD guaranteeing a certain percentage.

directly by RECD or made by a private lender with RECD guaranteeing a certain percentage.

For a veteran to obtain a VA loan, the VA must issue a certificate of eligibility. entitlement. endorsement. enterprise.

eligibility.

Rural Economic and Community Development (RECD) loans may be insured loans or direct loans. guaranteed loans or direct loans. guaranteed loans or insured loans. direct loans only.

guaranteed loans or direct loans.

The primary purpose of private mortgage insurance (PMI) is to protect the lender. borrower. lender and borrower. borrower and the VA.

lender.