CMP Conventional Loan Programs and Secondary Market 3

Question 1

What is the maximum number of financed properties a borrower may have simultaneously and still qualify for a conventional investment property loan under standard Fannie Mae guidelines?

Accepted Answer

10

Answer

Fannie Mae allows borrowers to finance up to 10 properties simultaneously, including their primary residence, under its multiple financed properties policy.

Question 2

Under Fannie Mae guidelines, how long must a borrower wait to qualify for a new conventional loan after a foreclosure is completed?

Accepted Answer

7 years

Answer

Fannie Mae requires a 7-year waiting period from the foreclosure completion date before a borrower can obtain a new conventional loan.

Question 3

What are Loan-Level Price Adjustments (LLPAs) on conventional loans?

Accepted Answer

Risk-based pricing adjustments to conventional loan rates based on credit score, LTV, and other factors

Answer

LLPAs are risk-based pricing adjustments imposed by Fannie Mae and Freddie Mac that increase or decrease loan pricing based on credit risk factors like credit score and LTV ratio.

Question 4

Freddie Mac's Home Possible program is specifically designed to assist:

Accepted Answer

Low-to-moderate income borrowers purchasing a primary residence with a 3% minimum down payment

Answer

Home Possible is Freddie Mac's affordable lending program offering 3% minimum down payments for low-to-moderate income borrowers purchasing a primary residence.

Question 5

Under the Homeowners Protection Act (HPA), a borrower may request cancellation of PMI on a conventional loan when the LTV reaches:

Accepted Answer

80%

Answer

The Homeowners Protection Act allows borrowers to request PMI cancellation once the LTV reaches 80% based on the original purchase price and scheduled amortization.

CMP - Certified Mortgage Processor Practice Test

CMP - Certified Mortgage Processor Practice Test

CMP Conventional Loan Programs and Secondary Market 3