Practice Test Geeks(CRU) Certified Residential Underwriter Practice Test
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Underwriting Decision-Making & Loan Approval Flashcards

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

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  1. A borrower's file shows a 12-month history of on-time payments but a prior 120-day late from 3 years ago. How should the underwriter handle this?

    Answer: Consider the late as a major derogatory and require a written explanation

    A 120-day late is a major derogatory event that requires a written explanation and compensating factors even when it falls outside the standard 24-month window.

  2. Which of the following is considered an acceptable source of funds for a down payment under conventional guidelines?

    Answer: A documented withdrawal from a retirement account

    Documented withdrawals from retirement accounts are an acceptable source of down payment funds under Fannie Mae and Freddie Mac guidelines.

  3. An underwriter is reviewing a self-employed borrower who shows $80,000 in net income on Schedule C but added back $15,000 in depreciation. What is the qualifying income?

    Answer: $95,000

    Depreciation is a non-cash deduction and must be added back to Schedule C net income, yielding $80,000 + $15,000 = $95,000.

  4. Under FNMA guidelines, what is the maximum seller concession allowed on a primary residence purchase with an 85% LTV?

    Answer: 6%

    Fannie Mae allows seller concessions up to 6% of the sales price for primary residence loans with LTV above 75% and up to 90%.

  5. A borrower has $500 in monthly student loan payments currently in deferment. How must the underwriter treat this debt for FHA loans?

    Answer: Use 1% of the outstanding balance as the monthly obligation

    FHA guidelines require the underwriter to use 1% of the outstanding student loan balance as the monthly payment when the loan is in deferment.

  6. What is the primary purpose of a Transmittal Summary (Form 1008) in the underwriting process?

    Answer: To summarize the underwriting decision and key loan data for investor review

    Form 1008 is a transmittal summary that compiles key loan data, borrower information, and the underwriter's decision for secondary market review.

  7. A borrower receives a base salary of $60,000 and an annual bonus of $12,000 consistently paid for the last 2 years. What monthly income should be used for qualifying?

    Answer: $5,500

    The $12,000 bonus is documented for 2 years and can be averaged, adding $1,000/month to the $5,000 base for a total of $5,500.