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.   Lenders don't review credit history or scores for this loan.
B.   It has less stringent qualifying requirements than a conventional loan.
C.   It is an interest-only loan.
D.   He can skip a certain number of payments without penalty
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.   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
C.   Go up or down, but can't exceed a two-percentage-point change over the life of the loan
D.   Always go up or stay the same each year
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.   Not exceed 10% of the mortgage value
B.   Not exceed a loan-to-value ratio of 96.5%.
C.   Be less than $3,000 over the current appraised value of the home
D.   Fall within the FHA mortgage limit for the area where the property is located.
Question #5
The FHA ______ program allows a borrower to refinance an FHA loan without verifying income or assets.
A.   Section 251 Refinance
B.   Easy-Peasy Refinance
C.   No Verification Refinance
D.   Streamline Refinance
Question #6
For borrowers who already have an FHA loan, the Streamline Refinance program offers the benefit of ______.
A.   An unlimited loan-to-value ratio
B.   Allowing the borrower to borrow extra cash over the outstanding mortgage amount
C.   Removing the MIP requirement
D.   Prohibiting the lender from charging financing fees
Question #7
Which of the following statements is true about government loans?
A.   They originate in the secondary market.
B.   They're serviced by the U.S. Department of the Treasury.
C.   They're insured or guaranteed by a government agency.
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 prior to beginning the work
B.   Half is received up front and the other half after the work is completed and approved
C.   Prior to work commencing, but payment is subject to a discounted rate because it's an FHA loan
D.   As a lump sum after completing the work

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