CMA - Certified Mortgage Advisor Mortgage Products and Programs Questions and Answers

Question 1

A client is considering a USDA Guaranteed Rural Housing loan. Which of the following is a key eligibility requirement they must meet for this specific program?

Accepted Answer

The borrower's household income cannot exceed 115% of the area median income.

Answer

The property must be a working farm or ranch.

Answer

A minimum down payment of 3.5% is required.

Answer

The borrower must be a first-time homebuyer.

Question 2

A 65-year-old homeowner with significant equity in their primary residence wants to access funds without taking on a monthly mortgage payment. Which mortgage product is specifically designed for this purpose?

Accepted Answer

A Home Equity Conversion Mortgage (HECM)

Answer

A jumbo loan

Answer

A VA Interest Rate Reduction Refinance Loan (IRRRL)

Answer

A conforming conventional loan

Question 3

What is the primary purpose of the VA funding fee associated with a VA-guaranteed home loan?

Accepted Answer

To reduce the financial burden on taxpayers by helping to fund the VA loan program.

Answer

To cover the cost of the property appraisal.

Answer

To pay the mortgage originator's commission.

Answer

To act as the first year's homeowners insurance premium.

Question 4

A prospective homebuyer is applying for an FHA-insured loan. Their credit score is 560. What is the minimum down payment requirement they must meet, according to FHA guidelines?

Accepted Answer

10%

Answer

3.5%

Answer

5%

Answer

20%

Question 5

Which of the following best distinguishes a 'jumbo' loan from a 'conforming' loan?

Accepted Answer

The loan amount of a jumbo loan is above the limits set by the Federal Housing Finance Agency (FHFA).

Answer

Jumbo loans are exclusively for investment properties, while conforming loans are for primary residences.

Answer

Jumbo loans always have a fixed interest rate, whereas conforming loans can be fixed or adjustable.

Answer

Jumbo loans do not require mortgage insurance, but conforming loans always do.

Question 6

A client is looking to purchase a multi-family home where they will live in one unit and rent out the others. Which of the following loan programs explicitly allows for the purchase of a 2-4 unit property, provided the borrower occupies one of the units as their primary residence?

Accepted Answer

FHA Standard 203(b) Loan

Answer

USDA Direct Loan

Answer

VA Interest Rate Reduction Refinance Loan (IRRRL)

Answer

Home Equity Conversion Mortgage (HECM)