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Products and Programs Flashcards

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

Read the first 7 Products and Programs flashcards as text

  1. Which index is most commonly used as the basis for adjustable-rate mortgage adjustments in the United States?

    Answer: SOFR

    The Secured Overnight Financing Rate (SOFR) replaced LIBOR as the primary benchmark index for new U.S. ARM products.

  2. A reverse mortgage allows eligible homeowners aged 62 or older to:

    Answer: Convert home equity into loan proceeds without a required monthly payment

    A reverse mortgage (typically a HECM) lets seniors access home equity as cash, a line of credit, or monthly advances with no required monthly repayment.

  3. Which conventional loan program is specifically designed for manufactured housing and allows a 3% down payment?

    Answer: Both A and C

    Both Fannie Mae's MH Advantage and Freddie Mac's CHOICEHome allow 3% down payment for qualifying manufactured homes with site-built features.

  4. The 'Good Neighbor Next Door' program offers a 50% discount on the list price of HUD homes for eligible buyers who are:

    Answer: Teachers, law enforcement officers, firefighters, and EMTs

    The HUD Good Neighbor Next Door program offers a 50% listing price discount to teachers, law enforcement officers, firefighters, and emergency medical technicians in revitalization areas.

  5. A lender who holds originated loans in their own portfolio rather than selling them on the secondary market is called a:

    Answer: Portfolio lender

    Portfolio lenders retain loans on their own balance sheet, allowing more flexible underwriting outside agency guidelines.

  6. An Energy Efficient Mortgage (EEM) allows borrowers to finance energy improvements by:

    Answer: Stretching the loan amount beyond the appraised value to include efficiency upgrades

    EEMs allow the cost of qualifying energy improvements to be added to the loan amount, above the home's appraised value, under FHA, VA, and conventional programs.

  7. Which mortgage product is best suited for a borrower who needs short-term financing to purchase a new home before selling their current one?

    Answer: Bridge loan

    A bridge loan provides short-term financing, often secured by the current home's equity, to cover the gap between buying and selling.