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
A HECM borrower moves to an assisted living facility for more than 12 consecutive months. What happens to the loan?
Answer: The loan becomes due and payable because the home is no longer the primary residence
If a borrower vacates the property for more than 12 consecutive months for medical reasons, the HECM becomes due and payable.
Which statement about the minimum age requirement for a HECM borrower is accurate?
Answer: All borrowers on title must be at least 62 years old
HUD requires every borrower whose name appears on the HECM loan to be at least 62 years of age.
An applicant owns a four-unit property and lives in one unit. Is this property eligible for a HECM?
Answer: Yes, properties with one to four units are eligible if the borrower occupies one unit as their primary residence
HECMs are available for one-to-four unit properties as long as the borrower occupies at least one unit as their principal residence.
What is a 'fully-funded LESA' and when is it required?
Answer: A set-aside that covers the full life expectancy of projected property charges, required when financial assessment reveals severe credit issues
A fully-funded LESA is required when Financial Assessment indicates a borrower has both insufficient residual income and unsatisfactory credit history, covering property charges for the borrower's entire projected lifespan.
Which citizenship or residency status makes a borrower ineligible for a HECM under FHA guidelines?
Answer: Undocumented non-citizen without lawful immigration status
FHA requires HECM borrowers to be US citizens or lawfully present non-citizens; undocumented individuals do not meet this requirement.
A homeowner's property is appraised at $900,000. The 2024 HECM loan limit (maximum claim amount) is $1,149,825. Which figure does the lender use to calculate the Principal Limit?
Answer: $900,000, because it is the lesser of the appraised value or the loan limit
The Principal Limit is based on the lesser of the appraised value or the HECM maximum claim amount.
What must a borrower do to maintain HECM eligibility on an ongoing basis after closing?
Answer: Continue paying property taxes, homeowners insurance, and maintain the property
HECM borrowers must remain current on property taxes, homeowners insurance, and property maintenance throughout the life of the loan.