Practice Test Geeks(CRMP) Certified Reverse Mortgage Professional Practice Test
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Client Assessment and Eligibility 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 Client Assessment and Eligibility flashcards as text

  1. A prospective HECM borrower owns a 6-unit mixed-use building and lives in one unit. Is this property eligible?

    Answer: No, HECM is limited to properties with 1 to 4 residential units

    HECM eligibility is restricted to 1- to 4-unit residential properties, so a 6-unit building does not qualify regardless of owner-occupancy.

  2. What is the primary purpose of HUD-approved HECM counseling in the client assessment process?

    Answer: To ensure borrowers understand loan terms, alternatives, and their obligations before proceeding

    HUD-approved counseling provides independent education so borrowers fully understand the HECM product, their obligations, and alternatives before making a decision.

  3. A borrower has unpaid homeowners association (HOA) dues creating a lien on the property. How does this affect the HECM assessment?

    Answer: The HOA lien must be resolved before closing since HECM must be in first-lien position

    HOA liens can take priority over mortgages in some states, so they must be resolved before or at closing to protect the HECM's first-lien position.

  4. Which condition would qualify a borrower's condominium unit for HECM financing?

    Answer: The condominium project is on HUD's approved condominium list or receives HUD spot approval

    Condominium units must be in a HUD-approved project or receive individual spot approval under HUD guidelines to be eligible for HECM.

  5. A financial assessment reveals a borrower has a pattern of late property tax payments. What tool can the lender use to mitigate this risk?

    Answer: A Life Expectancy Set-Aside (LESA) to fund future property tax and insurance payments

    A LESA (Life Expectancy Set-Aside) requires setting aside a portion of HECM proceeds to cover future property taxes and insurance, reducing default risk.

  6. A 65-year-old client asks about the HECM for Purchase program. Which statement accurately describes eligibility?

    Answer: The borrower must use personal funds to cover the difference between the HECM principal limit and the purchase price

    HECM for Purchase requires the borrower to bring the difference between the sales price and the HECM principal limit as a cash down payment from eligible sources.

  7. Which of the following best describes 'residual income' in the context of HECM financial assessment?

    Answer: Income remaining after subtracting all monthly debt obligations and living expenses

    Residual income is the amount of net income remaining after all monthly obligations and estimated living expenses are deducted, used to gauge a borrower's ability to maintain property charges.