CRMP CRMP Property Requirements and Appraisal Standards Questions and Answers 2 — Questions and Answers
Question 1: What is the maximum number of units allowed in a property that is eligible for a HECM?
- 1 unit only
- Up to 2 units
- Up to 4 units, with borrower occupying one unit (Correct answer)
- Up to 4 units regardless of occupancy
Correct answer: Up to 4 units, with borrower occupying one unit
HECM allows up to 4-unit properties as long as the borrower occupies one of the units as their principal residence.
Question 2: Can a HECM be placed on a property located on a Native American tribal trust land?
- No, tribal trust land is never eligible
- Yes, with a Section 184A loan guarantee under specific conditions (Correct answer)
- Only if the property is fee simple
- Yes, without any additional requirements
Correct answer: Yes, with a Section 184A loan guarantee under specific conditions
HECM Section 184A allows reverse mortgages on Native American tribal trust land under a special HUD program with specific conditions.
Question 3: Which of the following is NOT an FHA Minimum Property Standard that must be met for HECM eligibility?
- The property must have adequate heating
- The property must have a working septic system or sewer connection
- The property must have a garage (Correct answer)
- The property must have safe electrical systems
Correct answer: The property must have a garage
A garage is not an FHA Minimum Property Standard requirement; properties must be safe, structurally sound, and have functioning utilities.
Question 4: What must occur before a condominium unit can serve as collateral for a HECM loan?
- The condo association must approve the loan
- The condo project must be on the FHA-approved condominium list (Correct answer)
- The borrower must own at least 51% of the condo complex
- The condo must have been built after 1990
Correct answer: The condo project must be on the FHA-approved condominium list
The condominium project must be on HUD's FHA-approved condominium list, or undergo spot approval, before a HECM can be issued on any unit.
Question 5: Under HUD guidelines, who is responsible for selecting the HECM appraiser?
- The borrower selects their preferred appraiser
- The lender orders the appraisal through an approved FHA roster appraiser (Correct answer)
- The HUD field office assigns the appraiser
- The real estate agent recommends the appraiser
Correct answer: The lender orders the appraisal through an approved FHA roster appraiser
The lender must order the appraisal from an appraiser on the FHA Appraiser Roster, in compliance with appraiser independence requirements.
Question 6: How long is an FHA appraisal valid for a HECM loan application?
- 60 days
- 90 days
- 120 days, with a possible 30-day extension (Correct answer)
- 180 days
Correct answer: 120 days, with a possible 30-day extension
FHA appraisals for HECM are valid for 120 days from the effective date of the appraisal, with a possible 30-day extension if loan closing is imminent.
CRMP CRMP Property Requirements and Appraisal Standards Questions and Answers 2
What is the maximum number of units allowed in a property that is eligible for a HECM?