CMP CMP - Certified Mortgage Processor Property Types and Eligibility Questions and Answers 1

Question 1

Which property classification describes a single-family home that the borrower plans to occupy as their primary residence?

Accepted Answer

Owner-occupied primary residence

Answer

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?

Accepted Answer

10%

Answer

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?

Accepted Answer

4

Answer

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?

Accepted Answer

HOA meeting minutes, budget, master insurance policy, and condo questionnaire

Answer

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?

Accepted Answer

Whether the condo project meets Fannie Mae/Freddie Mac guidelines to be eligible for conventional financing

Answer

A 'warrantable' condo project meets GSE guidelines for eligibility, including concentration limits, owner-occupancy ratios, and HOA financial health.

CMP - Certified Mortgage Processor Practice Test

CMP - Certified Mortgage Processor Practice Test

CMP CMP - Certified Mortgage Processor Property Types and Eligibility Questions and Answers 1