CMP CMP - Certified Mortgage Processor Property Types and Eligibility Questions and Answers 1 — Questions and Answers
Question 1: Which property classification describes a single-family home that the borrower plans to occupy as their primary residence?
- Investment property
- Second home
- Owner-occupied primary residence (Correct answer)
- Non-owner occupied
Correct answer: Owner-occupied primary residence
A primary residence is a property the borrower intends to occupy as their main home, which typically qualifies for the most favorable loan terms and lowest down payment requirements.
Question 2: What is the minimum down payment typically required for a conventional conforming loan on a second home?
- 3%
- 5%
- 10% (Correct answer)
- 20%
Correct answer: 10%
Conventional guidelines generally require a minimum 10% down payment for a second home, reflecting the higher risk compared to primary residences.
Question 3: Under Fannie Mae guidelines, what is the maximum number of units allowed for a residential conforming mortgage?
- 2
- 4 (Correct answer)
- 6
- 10
Correct answer: 4
Fannie Mae conforming residential mortgages allow financing for properties with up to four units (1-4 family), with owner-occupancy required for the best terms.
Question 4: A processor receives a file for a condominium. Which document is required from the HOA to assess project eligibility?
- Property deed and title commitment only
- HOA meeting minutes, budget, master insurance policy, and condo questionnaire (Correct answer)
- Only the homeowner's current insurance declarations page
- A signed letter from the HOA president confirming no litigation
Correct answer: HOA meeting minutes, budget, master insurance policy, and condo questionnaire
Condo project eligibility requires a full review of the HOA budget, master insurance policy, project questionnaire, and meeting minutes to ensure the project meets lender and agency requirements.
Question 5: What does 'warrantability' mean in the context of a condominium project?
- The structural warranty provided by the developer
- Whether the condo project meets Fannie Mae/Freddie Mac guidelines to be eligible for conventional financing (Correct answer)
- A legal guarantee against HOA fee increases
- The FHA inspection certification for the building
Correct answer: Whether the condo project meets Fannie Mae/Freddie Mac guidelines to be eligible for conventional financing
A 'warrantable' condo project meets GSE guidelines for eligibility, including concentration limits, owner-occupancy ratios, and HOA financial health.
Question 6: A borrower is purchasing a manufactured home that is titled as real property. What must be confirmed about the land?
- The land must be at least 5 acres
- The borrower must own the land or hold a long-term leasehold interest, and the home must be permanently affixed (Correct answer)
- The home must have been built after 2000
- The land must be in a flood zone
Correct answer: The borrower must own the land or hold a long-term leasehold interest, and the home must be permanently affixed
For a manufactured home to be eligible for conventional mortgage financing as real property, the borrower must own the land and the home must be permanently affixed to a foundation.
CMP CMP - Certified Mortgage Processor Property Types and Eligibility Questions and Answers 1
Which property classification describes a single-family home that the borrower plans to occupy as their primary residence?