Practice Test Geeks(CRMP) Certified Reverse Mortgage Professional Practice Test
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Borrower Qualification Requirements Flashcards

7 cards from real CRMP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Borrower Qualification Requirements flashcards as text

  1. A borrower is 68 years old and owns a home with a remaining mortgage balance. How does this affect HECM eligibility?

    Answer: The borrower may be eligible; the reverse mortgage proceeds must first pay off the existing mortgage

    Existing mortgages do not disqualify a borrower; HECM proceeds are used to satisfy outstanding liens at closing.

  2. Which of the following best describes the 'primary residence' requirement for HECM eligibility?

    Answer: The borrower must occupy the property as their principal residence for at least 6 months per year

    HUD requires HECM borrowers to occupy the property as their principal residence, generally defined as living there more than half the year.

  3. A 62-year-old applicant is the sole owner of a home but their 55-year-old spouse also lives there. What is the correct course of action?

    Answer: The 55-year-old may be listed as a Non-Borrowing Spouse (NBS) with protections under current HUD guidelines

    HUD's Non-Borrowing Spouse (NBS) policy allows eligible NBS protections for spouses under 62, permitting them to remain in the home after the borrower's death.

  4. Under the Financial Assessment (FA) requirements, what is a lender primarily evaluating?

    Answer: The borrower's willingness and capacity to pay property charges such as taxes, insurance, and HOA fees

    Financial Assessment evaluates a borrower's ability and willingness to meet ongoing property charge obligations to protect both the borrower and the FHA insurance fund.

  5. Which property type is generally NOT eligible for a HECM?

    Answer: Cooperative (co-op) housing unit

    Co-op units are not eligible for HECM because the borrower holds shares rather than real property, which does not meet FHA collateral requirements.

  6. A lender determines a HECM applicant has a history of late property tax payments. What is the likely outcome under Financial Assessment rules?

    Answer: The lender may require a Life Expectancy Set-Aside (LESA) to cover future property charges

    When Financial Assessment reveals credit blemishes related to property charges, lenders may require a LESA to ensure future taxes and insurance are paid.

  7. At what point must a HECM borrower complete HUD-approved counseling?

    Answer: Before the loan application is submitted to the lender

    HUD mandates that borrowers receive independent counseling from a HUD-approved agency before any loan application is submitted.