Non-Traditional Mortgages (Oregon CE 2021)
A Payment-Option ARM is designed to give a borrower which option? A) A payment method such as check, ACH, or credit card B) To pay varying amounts each month C) To pay or not to pay each month D) To pay back the entire sum at the end of the loan
B) To pay varying amounts each month A payment-option ARM allows a borrower to choose among several payment options each month, either a traditional mortgage payment, an interest-only payment, or a minimum payment.
Which of the following energy efficient mortgage programs is associated directly with the property and not the borrower? A) VA Energy Efficient loan B) Property Assessed Clean Energy loan C) HomeStyle® loan D) FHA Energy Efficient loan
B) Property Assessed Clean Energy loan Borrowers utilizing Property Assessed Clean Energy (PACE) financing repay these loans over 10 to 20 years through an annual assessment added directly to the property's real estate tax bill. As such, PACE loans are associated with the property and not the borrower.
Which sentence best describes a "7/1 ARM" A) A mortgage with a fixed rate for 7 years that adjusts every year thereafter. B) A fixed rate mortgage that optionally converts to an adjustable mortgage after 7 years. C) A mortgage with a 7-to-1 adjustable ratio. D) An adjustable rate mortgage that increases 7% each year.
A) A mortgage with a fixed rate for 7 years that adjusts every year thereafter.
Borrowers have ________ to complete the renovation phase of their Fannie Mae HomeStyle® Renovation loan. A) 12 months B) 120 days C) 240 days D) 6 months
A) 12 months HomeStyle loan renovations must be completed within 12 months of the loan being transferred to Fannie Mae and the construction funds added to the custodial escrow account. The borrower must pay for any changes to the renovation that is not covered by the loan proceeds.
Which of the following persons would NOT be eligible for a VA loan? A) A police officer that has not served in the military B) An 8-year member of the National Guard C) A person honorably discharged from military service 7 years ago D) A person on active military duty
A) A police officer that has not served in the military VA loan guarantees are available to military service members. Loan eligibility is based on the length of continuous active service, with the minimum ranging from 90 days to 24 months, depending on when the veteran served.
Which one of the following is NOT an improvement that would qualify for the HomeStyle® Renovation program? A) A portable garage to house a seasonal-use RV B) Connecting the property to the city sewer line C) A new patio and outdoor kitchen D) Landscaping the front yard
A) A portable garage to house a seasonal-use RV Allowed improvements are those that are attached to the property. A portable garage can be dismantled and moved.
Which of the following properties would a military veteran NOT be eligible for under a VA loan? A) An 8-plex, as long as the owner lives in it B) New construction C) A condo D) A farm
A) An 8-plex, as long as the owner lives in it Owner-occupied dwellings of one-to-four units qualify for VA loans. Other types of properties that can be purchased using a VA loan include condominiums (as long as the condo is in a VA- or HUD-approved condominium project), manufactured homes if the home is fixed to a permanent foundation, farm property, and even new construction. With a new construction purchase, the builder must be registered with the VA as well as provide for specific home warranties.
Which of the following is NOT an eligible improvement on the Limited 203(k) loan? A) Building a new detached garage. B) A bathroom remodel, including demo of an existing bathroom, replacing all fixtures, vanity, toilet, tub, shower, and flooring. C) Installing new carpet and wood floors. D) Replacing drywall damage in all lower floor rooms due to previous flooding.
A) Building a new detached garage. The limited 203(k) does not allow for major remodeling or new construction such as a new detached garage.
Which of the following situations would NOT be covered by a 203(k) loan? A) Buying vacant land to be used later for a single-family dwelling B) Converting a small apartment building into a 4-plex C) Converting a large house into a 3-plex D) Demolishing a house down to the foundation and rebuilding it
A) Buying vacant land to be used later for a single-family dwelling Proceeds from the 203(k) loan can be used for 1) purchasing and rehabilitating an existing dwelling; 2) moving a dwelling from one site to a new foundation at a new location; and 3) refinancing and rehabilitating the dwelling. The 203(k) loan can also be used to convert a single-family house into a one-to-four unit dwelling or used to downsize an existing multi-family property to a one-to-four unit dwelling. For properties that will be demolished during the rehabilitation, the foundation must be left in place.
Which other loan program most closely resembles the Fannie Mae Homestyle program? A) FHA 203(k) B) FEMA Rehab loans C) FEMA Revitalization Zone products D) FHA 203(b)
A) FHA 203(k) The FHA 203(k) was the loan program that most loan originators turned to when they needed a rehab loan program for their clients.
How does Fannie Mae Homestyle compare to the FHA 203(k) loan program? A) HomeStyle allows more renovation options B) HomeStyle allows fewer renovation options C) HomeStyle does not require a down payment D) HomeStyle does not require a home inspection
A) HomeStyle allows more renovation options In general, a wide variety of improvements qualify for the HSR program. As long as the improvement or renovation is affixed to the property and adds value to the property, it is eligible for the program. This could be as simple as painting or new carpet, or more complex renovations such as new landscaping, structural changes, or even the addition of a swimming pool.
Travis plans to finance the construction of a new swimming pool into the loan for the house he is buying. Which of the following loan programs could he use? A) HomeStyle® Renovation B) Limited 203(k) C) Homepath Renovation D) 203(k)
A) HomeStyle® Renovation Luxury items, such as swimming pools and basketball courts, are not allowed on the standard 203(k) loan or the Limited 203(k). Only the HomeStyle Renovation loan can include the cost of swimming pool construction. Fannie Mae's HomePath program was retired in October 2014.
Which audience is the HomeReady® program intended for? A) Low and medium-income borrowers B) Real estate investors C) Persons with bad credit D) Rich persons trying to revitalize a neighborhood
A) Low and medium-income borrowers Fannie Mae's HomeReady® mortgage program affords borrowers earning low-to-moderate incomes with the opportunity to secure home financing with a minimum down payment, no cash out-of-pocket, at reduced interest rates, and with a reduced mortgage insurance premium that can be eliminated (with restrictions) once the loan's LTV amortizes down to 80%.
Which one of the following would NOT be a qualifying property improvement for an energy efficient mortgage? A) Replacing carpet B) Caulking and weather stripping all exterior openings C) Adding insulation in the attic and walls D) Installing energy-efficient windows and doors
A) Replacing carpet Replacing carpet is not an energy efficient improvement. EEMs can be used for insulation, weatherproofing, and energy-efficient windows and doors.
The HomeStyle® Renovation loan program requires the use of __________ to control, coordinate, and oversee the entire construction project. A) a general contractor B) an architect C) a loan underwriter D) a FNMA supervisor
A) a general contractor The HomeStyle Renovation loan program requires the use of a general contractor to control, coordinate, and oversee the entire construction project.
A Standard 203(k) loan is a loan designed for: A) fixing up a property that needs repairs. B) sellers looking to transfer ownership of an existing loan to the buyer. C) first-time home buyers. D) creating a savings plan for home owners.
A) fixing up a property that needs repairs. A Standard 203(k) loan allows a borrower to make repairs on a property using one loan. Proceeds from this loan may be used for purchasing and rehabilitating an existing dwelling, moving a dwelling from one site to a new foundation at a new location, or refinancing and rehabilitating the dwelling.
Energy Efficient Mortgage (EEM) programs are useful for A) improving a building's energy efficiency. B) financing a certified green building residential purchase. C) adding landscaping to a homeowner's property. D) replacing the roof on a veteran's primary residence.
A) improving a building's energy efficiency. Energy Efficient Mortgage (EEM) programs are effective tools with which to finance real property energy improvements in order to protect the environment, enhance energy efficiency, and reduce homeowners' energy costs. An EEM does NOT finance a property purchase or refinance the homeowner's existing mortgage. EEMs are used for cost-effective building upgrades and not complete re-dos such as a new roof or outdoor landscaping.
How long must a person live in a home to qualify for the GNND program? A) 5 years B) 3 years C) 12 months D) 30 years
B) 3 years The qualified borrowers must agree to live in the home for three years and it must be their sole residence.
Compared to similar FHA loans, HomeReady® conventional loans can allow as little as a _____ down payment. A) 1% B) 3% C) 10% D) 30%
B) 3% Although standard FHA 203(b) mortgage financing offers borrowers down payment options as low as 3.5%, Fannie Mae's conventional HomeReady® program allows low-to-moderate income borrowers the opportunity to close on a home with a down payment of as little as 3%.
Which best describes FHA loans? A) Loans that let the borrower choose their payback schedule B) A collection of programs overseen by the Federal Housing Administration C) Loans that decrease over time D) Loans that are NOT guaranteed by the US Government
B) A collection of programs overseen by the Federal Housing Administration The Federal Housing Act (FHA) created numerous loan programs administered by the Federal Housing Administration within the Department of Housing and Urban Development. The borrower eligibility, calculations, and documentation requirements are different for each program.
Which sentence BEST describes an Adjustable Rate Mortgage? A) A mortgage that lets the borrower choose their own APY B) A mortgage with an interest rate tied to an economic index C) Any mortgage that is not a 30-year fixed D) A mortgage with a sliding-scale fee for low-income borrowers
B) A mortgage with an interest rate tied to an economic index An adjustable rate mortgage, also called an ARM, is a mortgage with an interest rate that is tied to an economic index. The borrower's interest rate is adjusted as the index changes.
What is EEM for? A) Reducing construction material waste. B) Covering the costs of adding energy efficient upgrades. C) Adding value to a property. D) Reducing the down payment to allow more people to qualify.
B) Covering the costs of adding energy efficient upgrades.
Which of the following programs would most likely interest a person who wants to cut monthly utility bills? A) VA Loan B) EEM C) FHA 203(b) D) ARM
B) EEM Energy Efficient Mortgages (EEMs) are designed to help pay for energy upgrades that cut energy costs over time.
A person getting a loan under the Good Neighbor Next Door program must agree to which requirement? A) Take an online home ownership training course. B) Live in the purchased home for the next 3 years. C) Stay employed for the next 3 years. D) Not rent out rooms in the house.
B) Live in the purchased home for the next 3 years. When a qualified borrower purchases a property under the Good Neighbor Next Door program, the borrower agrees to own and live in the property as their sole residence for a minimum three-year period. Borrowers are required to certify every year that they are living in the property.
A Limited 203(k) loan is intended for what purpose? A) Repairs that can only be performed by specialist contractors B) Minor repairs C) Repairs to be performed only by the homeowner D) Major repairs
B) Minor repairs The Limited program can be used for rehabilitations and improvements that are not complicated and don't require the services of consultants, architects, and contractors to create architectural exhibits and plans.
What limits a "Limited 203(k)" loan compared to a Standard 203(k) loan? A) The down payment. B) The size and extent of needed repairs. C) The persons qualified to do the work D) The interest rate.
B) The size and extent of needed repairs.
Who are VA Loans intended for? A) Vacation timeshare owners B) US Military veterans C) Purchasers of vacant lots that have no existing structure D) Borrowers that are also licensed real estate agents
B) US Military veterans VA loan guarantees are available to military service members from the U.S. Veterans Administration (VA). The Veterans Administration does not fund the veteran's loan; rather, it insures the lender's loan amount, up to a certain amount, from a veteran's loan default. Loan interest rates are typically below market as compared to conventional fixed-rate loans.
A Homestyle® EEM designed to cover a $5000 solar panel installation would require A) a 10% down payment. B) a report detailing proposed energy savings. C) a co-signer on the loan. D) certification from at least two registered Energy Inspectors.
B) a report detailing proposed energy savings. Unless the purpose of the energy efficiency improvements is to finance basic weatherization or water efficiency items, such as the purchase and installation of programmable thermostats, insulation, or low-flow toilets and/or showerheads amounting to no more than $3,500, a residential energy report will be required.
Which one of the following properties does NOT qualify for an FHA-insured loan? A) A condo unit within an FHA-approved condominium project B) A manufactured home that is fixed to a permanent foundation C) A bed and breakfast house D) A single-family residential property
C) A bed and breakfast house FHA insures loans for homeowner owner-occupied principal residential purposes. Hotels, motels, bed and breakfasts, fraternity housing, and private clubs are not eligible properties, even if the owner lives on the property.
Which of these borrowers would likely NOT qualify for a VA loan? A) A borrower still on active military duty B) A borrower with excellent credit C) A borrower with bad credit D) A borrower with no credit
C) A borrower with bad credit VA will analyze a borrower's past credit performance to determine loan approval. A borrower who has made timely payments for the last 12 months demonstrates their willingness to repay future credit obligations. However, a borrower who reflects continuous slow payments, judgments, and delinquent accounts is not a good candidate for loan approval.
Which of the following home improvements would NOT qualify under a EEM? A) Replacing a water heater with a higher efficiency model B) Insulating pipes C) Adding a mini putting green to the backyard D) Adding insulation to the attic space
C) Adding a mini putting green to the backyard A mini putting green would be neither energy efficient or cost effective.
Your buyer client wants to buy his first home. He is single, in his 20's, and has a modest income. He can afford a mortgage only if he gets a bigger house and rents out individual rooms to roommates to supplement his income. Which loan program might accommodate this scheme? A) FHA 203(b) B) 5/1 Hybrid ARM C) Fannie Mae HomeReady D) EEM v2.0
C) Fannie Mae HomeReady
Which of the following programs would most likely interest a buyer with low income? A) Fannie Mae HomeStyle B) EEM C) Fannie Mae HomeReady D) ARM
C) Fannie Mae HomeReady The Fannie Mae HomeReady program is designed to help buyers with low to moderate incomes buy a home.
A young couple of moderate income wants to get into the house-flipping business. They are looking for their first fixer-upper property. What program might apply to their situation? A) VA Loan B) FHA 203(b) C) Fannie Mae Homestyle D) USDA Loan
C) Fannie Mae Homestyle The Fannie Mae Homestyle is a fixer upper loan intended to cover costs associated with rehabilitating and improving a property.
A 203(k) loan is used for what purpose? A) Reducing racial bias in loan origination. B) Providing home ownership to low-income families. C) Fixing up a property that needs repairs. D) Improving property values with luxury items not allowed by standard loans.
C) Fixing up a property that needs repairs.
Which of the following is a major difference between the 203(k) and HomeReady® loan programs? A) 203(k) does not require a down payment while HomeReady requires a minimum 3.5% B) A mixed-use residential/commercial property would only qualify for HomeReady C) Homebuyer counseling is required for HomeReady but not for 203(k) D) HomeReady is for property purchases, and 203(k) is only for loan refinances
C) Homebuyer counseling is required for HomeReady but not for 203(k) HomeReady® borrowers must complete independent, third-party, homebuyer counseling prior to settling on a HomeReady® mortgage. FHA borrowers do not. Both 203(k) and HomeReady require a down payment and can be used for property purchases. Mixed-use is allowed for a 203(k) purchase as long as the commercial portion is limited to a certain percentage of the property space depending on the size of the property, though HomeReady only permits primary residence purchases.
A type of nontraditional mortgage that allows a borrower to pay only the loan's interest for a specified number of years, after which the borrower must begin to pay the principal plus interest, is a __________ . A) Hybrid ARM B) Fully Indexed Rate Loan C) Interest-Only (I-O) Payment Plan D) Traditional Payment Option ARM
C) Interest-Only (I-O) Payment Plan Interest-only or I-O payment plans allow the borrower to pay only the loan's interest for a specified number of years. After that, the monthly payment will increase even if interest rates stay the same, because the borrower must begin to pay back the principal and the interest each month.
What is the advantage of an Interest-Only ARM loan? A) The borrower is allowed to pay only the interest if they cannot afford the normal monthly payment B) The borrower only pays interest for the entire life of the loan C) It lets the borrower make smaller monthly payments at the beginning of the loan D) Monthly payments are divided into irregular segments to better handle missed payments
C) It lets the borrower make smaller monthly payments at the beginning of the loan These ARM loans are also called I-O payment plans, and allows the borrower to pay only the loan's interest for a specified number of years, typically for three to 10 years. This allows the borrower to have a smaller monthly payments during the specified period.
What would happen if a person who qualified for a GNND loan moved out after 6 months and then rented the house out as a short-term vacation property? A) The borrower would have to submit paperwork to HUD. B) Nothing. That's the whole point of the program! C) It's a felony. There could be criminal charges! D) The borrower would need to get the property certified as a vacation rental.
C) It's a felony. There could be criminal charges! It is important for borrowers to promptly complete the annual certification to avoid noncompliance. Falsifying information on this certification is a felony. HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties.
Which of the following would NOT likely be covered by an EEM? A) Upgrading old appliances B) Replacing single pane windows C) Lead-based paint mitigation D) Adding solar panels
C) Lead-based paint mitigation E.E.M. programs are an effective means to finance real property energy improvements to enhance energy efficiency and reduce energy costs.
Which of these projects would NOT qualify under the Homestyle® loan program? A) Replacing old bathroom fixtures B) Adding an in-ground swimming pool C) Tearing down the existing house and building a new one in its place D) Adding a covered patio to the backyard
C) Tearing down the existing house and building a new one in its place Luxury items, such as outdoor kitchens, may either be installed or repaired under the HomeStyle program. The renovation must be affixed/attached to the property. A HomeStyle cannot be used for a teardown/rebuild.
What role does the Veterans Administration play in a VA loan? A) The VA funds the loan B) The VA originates the loan C) The VA guarantees the loan D) The VA pays back the loan
C) The VA guarantees the loan Once the lender approves the veteran borrower, the VA loan is guaranteed by the U.S. government. The guaranteed amount today is $36,000 for loans valued up to $144,000. For loans over $144,000, the maximum guaranteed amount will be 25% of the loan. In the event of default resulting in foreclosure, the VA will reimburse the lender for part or all of the loss.
Which sentence best describes the purpose of the Good Neighbor Next Door program? A) To allow home ownership for low-income families B) To expand the portfolio of available homes in GNND zones C) To encourage community-support personnel to move into revitalization areas D) To reduce wealth held by "1-percenters"
C) To encourage community-support personnel to move into revitalization areas The Good Neighbor Next Door program encourages homeownership by community support personnel in HUD-designated revitalization areas by offering qualified purchasers a 50% discount off the list price of homes available from HUD's inventory. The qualified borrowers must agree to live in the home for three years and it must be their sole residence. The house must also be in a Good Neighbor Next Door "Revitalization Area."
What is the main purpose of the HomeReady® program? A) To revitalize properties in neighborhoods damaged by natural disasters B) To educate persons looking to buy their first home C) To provide home ownership opportunities to persons of low to moderate incomes D) To reduce racial discrimination in minority neighborhoods
C) To provide home ownership opportunities to persons of low to moderate incomes The HomeReady® program's primary goal is to provide low-to-moderate-income individuals, families, and households with the opportunity to purchase a home affordably.
A mortgage with an interest rate that is tied to an economic index is called __________ . A) a Conforming Mortgage B) a Fluctuating Index Mortgage C) an Adjustable Rate Mortgage D) an Index Dependent Mortgage
C) an Adjustable Rate Mortgage An adjustable rate mortgage, also called an ARM, is a mortgage with an interest rate that is tied to an economic index. The borrower's interest rate is adjusted as the index changes.
A Hybrid ARM loan is a type of loan that: A) allows the borrower to only pay the loan's interest. B) recalculates itself every 10 years. C) can be described by using numbers such as 5/1 or 3/1. D) has a lump payment at the end of a set period.
C) can be described by using numbers such as 5/1 or 3/1. Hybrid ARMs are described with numbers such as "1/1," "3/1," and "5/1." The first number in each set refers to the initial period of the loan, during which the borrower's interest rate will stay the same for that period of years. The second number is the adjustment period, showing how often adjustments can be made to the rate after the initial period has ended.
One unique feature of HomeReady® loans is it A) does not require an initial down payment. B) allows borrowers to pay back principal early. C) factors in income from renting out rooms in the house. D) is only for persons who make less than $35,000 per year.
C) factors in income from renting out rooms in the house. New homeowners frequently supplement their income by renting out rooms or accessory dwelling units (ADUs) associated with the home that they purchased. Although standard conventional financing does not usually allow for the consideration of future rental or boarder income, Fannie Mae's HomeReady® mortgage program does.
For an Energy Efficient Mortgage, a Home Energy Rater will inspect the property and create a report that outlines: A) whether the property qualifies for an EEM. B) the construction schedule and contractor fees for the energy upgrades. C) the house's current energy efficiency rating and recommended cost-effected upgrades. D) the lender's maximum loan funding amount.
C) the house's current energy efficiency rating and recommended cost-effected upgrades. A trained Home Energy Rater will create a Home Energy Rating Systems (HERS) Report that contains an overall rating of the house and recommendations for cost-effective energy upgrades, including how much the upgrades will cost and the estimated annual savings.
Which of the following properties does NOT qualify for a Fannie Mae HomeStyle® Renovation loan? A) A one-unit vacation home B) A manufactured home C) A single-family home D) A new construction duplex
D) A new construction duplex Builder new construction is not eligible for a HSR loan.
If a borrower cannot income qualify for a HomeReady® mortgage their own, what option is available? A) The borrower can have all fees waived by taking the education course first B) The borrower can apply for a Leniency Grant C) The borrower can be eligible for HUDs Low-Income Priority Housing program D) A non-occupant can co-sign on the loan
D) A non-occupant can co-sign on the loan If a borrower cannot income qualify for a HomeReady® mortgage on his or her own, the income from a non-occupying co-borrower may provide the necessary debt-to-income (DTI) ratio reduction to enable the borrower's approval. A non-occupying co-borrower may be anyone willing to assume an ownership interest in the property while obligating him or herself to the debt without taking residency in the newly-purchased property.
Who would NOT qualify for a Good Neighbor Next Door loan? A) A police officer B) A 5th-grade teacher C) A firefighter D) A retired heart surgeon
D) A retired heart surgeon The Good Neighbor Next Door program provides a benefit to borrowers who are law enforcement officers, firefighters, emergency medical technicians, or pre-k through 12th grade teachers.
An EEM is intended for what purpose? A) Assigning an existing loan to a new borrower B) Reducing a loan's initial interest rate C) An opportunity for home ownership for low-income families D) Adding energy saving improvements
D) Adding energy saving improvements E.E.M. programs are an effective means to finance real property energy improvements to enhance energy efficiency and reduce energy costs. But E.E.Ms can also be used to purchase and install such things as energy-efficient appliances and equipment, active and passive solar energy equipment, active and passive wind technology equipment, reinforcing a home's insulation, and install energy-efficient windows and doors.
In casual conversation, your buyer client mentions that she is a full-time EMT (Emergency Medical Technician). What loan program might especially interest this person? A) Fannie Mae HomePath B) A "5/1" Hybrid ARM. C) Interest-Only ARM (I-O) D) Good Neighbor Next Door
D) Good Neighbor Next Door EMTs qualify for the Good Neighbor Next Door program.
What is the primary purpose of the FHA loan programs? A) Improve the stability of secondary markets B) Enforce fair housing laws in minority neighborhoods C) Create profit to supplement tax income D) Improve home ownership opportunities for the general public
D) Improve home ownership opportunities for the general public The Federal Housing Administration (FHA) was established in 1934. Its purpose was to provide and improve home ownership opportunities to the general public through guaranteed private home mortgages and funds to promote housing construction.
What are FHA loan programs primarily intended for? A) Fast-track paperwork to reduce government resources required to process loans. B) Decrease the number of empty homes sitting on the market. C) Decrease backlog of state-owned properties. D) Improve home ownership opportunities for the general public.
D) Improve home ownership opportunities for the general public.
Which one of the following is an eligible improvement on the Limited 203(k) loan? A) Building a gazebo for the backyard garden B) Constructing a bedroom addition C) Constructing a new in-ground swimming pool D) Installing drywall and carpet in an unfinished basement
D) Installing drywall and carpet in an unfinished basement Landscaping, major additions, or structure repairs are not allowed on the Limited loan. Finishing an unfinished basement is allowed.
VA loans are primary intended for which audience? A) Police officers. B) Teachers. C) EMTs D) Military veterans.
D) Military veterans.
The main difference between the Property Assessed Clean Energy Program (PACE) and other EEMs is A) PACE loans can include multiple smaller loans. B) PACE loans are associated with the entire neighborhood. C) PACE loans are associated with the borrower. D) PACE loans are associated with the property.
D) PACE loans are associated with the property. The primary difference between PACE financing and other types is that, unlike traditional loans that require periodic (typically monthly) repayments, borrowers utilizing PACE financing repay these loans over 10 to 20 years through an annual assessment added directly to the property's real estate tax bill. As such, PACE loans are associated with the property and not the borrower.
Which properties are eligible for GNND loans? A) Properties that need rehabilitation or that were seized as drug houses B) Properties in low-income neighborhoods C) Any property D) Properties on HUD's approved properties list
D) Properties on HUD's approved properties list Eligible properties come from HUD's list of properties located in revitalization areas. These areas are located throughout the country.
Which one of the following improvements is NOT eligible under the Limited 203(k) program? A) Plumbing upgrades B) Painting (exterior and interior) C) Kitchen remodeling D) Structural repairs
D) Structural repairs Major rehabilitation, major remodeling, structural repairs, landscaping, or repairs expected to take longer than 6 months are not eligible for the Limited 203(k).
Borrowers considering an ARM loan should receive this informative booklet published by the CFPB. A) The Ready for Success pamphlet B) The GAME book C) The MAGIC book D) The CHARM book
D) The CHARM book When a borrower applies for an ARM loan, the loan originator is required to give the borrower the Consumer Handbook on Adjustable Rate Mortgages (the CHARM booklet) within three business days of application.
Which one of the following is NOT a benefit a borrower would have with a HomeStyle® Renovation loan? A) A cost-effective way for a borrower to renovate and upgrade a property B) The loan amount is based on the property's appraised value after the improvements have been completed C) A single mortgage with renovation costs included in the loan D) The borrower works directly with Fannie Mae, who is typically more consumer friendly than the lender
D) The borrower works directly with Fannie Mae, who is typically more consumer friendly than the lender Some of the benefits that a borrower will receive with a HSR loan are cost-effective ways to renovate or improve a home, a single mortgage means lower closing costs and typically a lower interest rate on a first mortgage, borrowers can qualify for combined loan-to-value (CLTV) of up to 105% with eligible Community Seconds® subordinate financing, and the loan amount based on as completed value of the home or the cost basis, whichever is less. The borrower does not work directly with Fannie Mae to obtain the loan.
One of the main advantages of most FHA loans is: A) citizenship is not required. B) no mortgage insurance required. C) 50-year payback schedule. D) a better interest rate that conventional mortgages.
D) a better interest rate that conventional mortgages. A distinct advantage of an FHA insured loan is better interest rates and lower monthly mortgage insurance premiums (MIP). Depending on the lender, standard FHA loan interest rates are usually better than a conforming 30-year fixed loan.
The Good Neighbor Next Door program helps a qualified borrower purchase a home in a HUD-revitalization area by offering qualified purchasers __________ . A) the lowest mortgage rate B) preferred status when making an offer C) a one-time grant D) a discount on the list price
D) a discount on the list price The Good Neighbor Next Door program may help a qualified borrower purchase a home in a HUD-revitalization area by offering qualified purchasers a 50% discount off the list price of homes available from HUD's inventory.
When a borrower applies for an adjustable rate mortgage, the loan originator is required to give the borrower: A) a choice of consumer indexes to base the index rate on. B) the HELOC Booklet. C) a copy of the Interagency Guidance. D) the Consumer Handbook on Adjustable Rate Mortgages.
D) the Consumer Handbook on Adjustable Rate Mortgages. When a borrower applies for an ARM loan, the loan originator is required to give the borrower the Consumer Handbook on Adjustable Rate Mortgages (the CHARM booklet) within three business days of application.
A Hybrid ARM represented as "5/1" means: A) the loan is fixed for the first year and then can be adjusted 5 more times B) one fifth the rate of a regular ARM C) the loan rolls 5 separate loans into one single loan D) the loan is fixed for 5 years, then may adjust every year
D) the loan is fixed for 5 years, then may adjust every year Hybrid ARMs are described with numbers such as "1/1," "3/1," and "5/1." The first number in each set refers to the initial period of the loan (i.e., how many years before an adjustment starts), during which the borrower's interest rate will stay the same for that period of years. The second number is the adjustment period, showing how often adjustments can be made to the rate after the initial period has ended.
