CMA Mortgage Products and Programs 2

Question 1

Which loan program allows a borrower to finance both the purchase price and renovation costs into a single mortgage?

Accepted Answer

FHA 203(k) loan

Answer

The FHA 203(k) loan combines home purchase and renovation financing into one mortgage, making it ideal for fixer-uppers.

Question 2

A borrower wants to refinance their existing VA loan with minimal documentation and no appraisal. Which program applies?

Accepted Answer

VA Interest Rate Reduction Refinance Loan (IRRRL)

Answer

The VA IRRRL (also called VA Streamline) allows veterans to refinance with reduced documentation and typically no appraisal.

Question 3

What distinguishes a 'super conforming' loan from a standard conforming loan?

Accepted Answer

It exceeds the standard loan limit but stays within higher limits for designated high-cost areas

Answer

Super conforming loans exceed the baseline conforming loan limit but fall within the higher limits set by FHFA for high-cost housing markets.

Question 4

Under the USDA Guaranteed Loan Program, what is the maximum debt-to-income ratio typically allowed without a compensating factor?

Accepted Answer

29% front-end / 41% back-end

Answer

USDA Guaranteed Loans typically allow a maximum of 29% front-end and 41% back-end DTI ratios without compensating factors.

Question 5

A borrower has a FICO score of 580 and wants the minimum possible down payment on an FHA loan. What is the minimum down payment required?

Accepted Answer

3.5%

Answer

Borrowers with credit scores of 580 or higher qualify for FHA's minimum 3.5% down payment; scores below 580 require 10%.

(CMA) Certified Mortgage Advisor Practice Test