CA Real Estate Finance Course » 2021 » Sec 8 Unit 3 Exam

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Question #1
Which of the following statements is true about the annual MIP on an FHA mortgage?
A.   It will increase each year as the loan is paid down.
B.   It's a one-time charge that the borrower may choose to pay at closing or finance into the loan amount.
C.   It will decrease each year as the loan is paid down.
D.   It's amortized and will be the same for every mortgage payment the borrower makes.
Question #2
Celeste hopes to qualify for an FHA loan. She calculates her housing ratio as 31%, and her total debt obligation as 42%. Her credit score is 580. Does she qualify under FHA underwriting guidelines?
A.   No, she doesn't meet the credit score requirement for an FHA loan.
B.   No, she doesn't meet the total debt obligation requirement for an FHA loan.
C.   Yes
D.   No, she doesn't meet the housing ratio requirement for an FHA loan.
Question #3
Carmen purchased a single-family residence in Monterey County for $480,000 using an FHA loan and FHA's minimum down payment. At the same time, Yancy made an offer on a single-family residence not far away in Fresno County for $300,000 with FHA's minimum down payment and was told he could not use an FHA loan for the purchase. Why?
A.   FHA loan limits in Fresno County are lower than they are in Monterey County.
B.   FHA has specific construction requirements, and counties with lower construction standards can't use FHA loans.
C.   Legislation in some counties prohibits the use of government-insured loans.
D.   Counties in high earthquake hazard areas aren't eligible for FHA loans.
Question #4
FHA county loan limits are based on ______.
A.   Lender judgment
B.   Property tax and square footage of property
C.   Median price for the area and property type
D.   Median income for the area and interest rates

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