CA Real Estate Finance Course » 2021 » Sec 8 Unit 2 Exam

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Question #1
Lucas would like to be a homeowner, but his low credit score makes lenders unwilling to give him a mortgage. What makes the 203(b) loan a more likely option for Lucas to qualify for a mortgage?
A.   It has less stringent qualifying requirements than a conventional loan.
B.   He can skip a certain number of payments without penalty
C.   It is an interest-only loan.
D.   Lenders don't review credit history or scores for this loan.
Question #2
The interest rate on an FHA Section 251 adjustable rate mortgage will ______.
A.   Always go down or stay the same each year
B.   Always go up or stay the same each year
C.   Go up or down, but can't exceed a two-percentage-point change over the life of the loan
D.   Go up or down, but can't change more than a maximum number of points allowed by the FHA over the life of the loan
Question #3
To qualify for the FHA Streamline Refinance program, a homeowner must ______.
A.   Have at least 15% equity in the home
B.   Not be using an FHA-insured loan currently
C.   Requalify under current income and housing ratio requirements
D.   Not be delinquent on mortgage payments
Question #4
On an FHA 203(k) loan, the combined cost of home value and rehab must ______.
A.   Be less than $3,000 over the current appraised value of the home
B.   Fall within the FHA mortgage limit for the area where the property is located.
C.   Not exceed 10% of the mortgage value
D.   Not exceed a loan-to-value ratio of 96.5%.
Question #5
The FHA ______ program allows a borrower to refinance an FHA loan without verifying income or assets.
A.   Section 251 Refinance
B.   No Verification Refinance
C.   Streamline Refinance
D.   Easy-Peasy Refinance
Question #6
For borrowers who already have an FHA loan, the Streamline Refinance program offers the benefit of ______.
A.   Allowing the borrower to borrow extra cash over the outstanding mortgage amount
B.   Prohibiting the lender from charging financing fees
C.   Removing the MIP requirement
D.   An unlimited loan-to-value ratio
Question #7
Which of the following statements is true about government loans?
A.   They're insured or guaranteed by a government agency.
B.   They're serviced by the U.S. Department of the Treasury.
C.   They originate in the secondary market.
D.   They're underwritten by the Federal Reserve.
Question #8
How and when does a contractor performing work associated with a 203(k) loan receive funds from the lender?
A.   As a lump sum after completing the work
B.   Prior to work commencing, but payment is subject to a discounted rate because it's an FHA loan
C.   As a lump sum prior to beginning the work
D.   Half is received up front and the other half after the work is completed and approved

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