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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.

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  1. Under the VA loan program, which of the following borrowers is exempt from paying the VA funding fee?

    Answer: Veterans receiving VA disability compensation

    Veterans receiving VA disability compensation are exempt from the VA funding fee, reducing their upfront loan costs.

  2. The maximum loan limit for an FHA-insured single-family loan in high-cost areas is set at what percentage of the FHFA conforming loan limit?

    Answer: 150%

    FHA high-cost area loan limits are set at 150% of the FHFA conforming loan limit for that area.

  3. A 'teaser rate' on an ARM is best described as:

    Answer: A temporarily discounted initial rate below the fully indexed rate

    A teaser rate is an artificially low introductory rate that is below the fully indexed rate (index + margin), used to attract borrowers.

  4. Which specialized loan program is backed by the Small Business Administration and can be used to purchase commercial real estate for an owner-operated business?

    Answer: SBA 504 Loan

    The SBA 504 Loan provides long-term, fixed-rate financing for major fixed assets like owner-occupied commercial real estate.

  5. Down Payment Assistance (DPA) programs are most commonly administered by:

    Answer: State and local Housing Finance Agencies (HFAs)

    State and local Housing Finance Agencies typically administer DPA programs funded through bond proceeds and federal grants.

  6. A non-qualified mortgage (Non-QM) loan differs from a qualified mortgage primarily because it:

    Answer: Does not meet the CFPB's Ability-to-Repay rule safe harbor requirements

    Non-QM loans fall outside the CFPB's qualified mortgage safe harbor, meaning the lender assumes more legal risk related to the Ability-to-Repay rule.

  7. Which HECM (Home Equity Conversion Mortgage) disbursement option provides the borrower with a guaranteed monthly payment for as long as they live in the home?

    Answer: Tenure payment plan

    The tenure payment plan provides equal monthly payments for as long as at least one borrower lives and occupies the home as the principal residence.