CMA Mortgage Products and Programs 3

Question 1

A borrower is purchasing a manufactured home on a permanent foundation. Which loan type is MOST appropriate?

Accepted Answer

FHA Title II loan

Answer

FHA Title II loans can finance manufactured homes on permanent foundations that meet HUD standards, treating them as real property.

Question 2

What is the primary purpose of the HomeReady mortgage program offered by Fannie Mae?

Accepted Answer

To expand homeownership for low-to-moderate income borrowers with flexible underwriting

Answer

HomeReady is designed to help low-to-moderate income buyers with features like reduced MI, low down payment, and flexible income sources.

Question 3

Which index is most commonly used as the benchmark for 5/1 ARM loans in the U.S. today?

Accepted Answer

Secured Overnight Financing Rate (SOFR)

Answer

SOFR has replaced LIBOR as the primary benchmark index for most adjustable-rate mortgages in the U.S. since 2023.

Question 4

A balloon mortgage with a 7/23 structure means the loan:

Accepted Answer

Amortizes over 30 years with a full payment due at year 7

Answer

A 7/23 balloon mortgage is amortized over 30 years but requires the full remaining balance to be paid at the end of year 7.

Question 5

Under Freddie Mac's Home Possible program, what is the maximum loan-to-value ratio allowed for a one-unit primary residence?

Accepted Answer

97%

Answer

Freddie Mac's Home Possible allows up to 97% LTV for one-unit primary residences, requiring only a 3% down payment.

(CMA) Certified Mortgage Advisor Practice Test