CRMP CRMP Property Requirements and Appraisal Standards Questions and Answers 1 — Questions and Answers
Question 1: Which property types are eligible for a HECM loan?
- Only single-family detached homes
- Single-family homes, HUD-approved condos, and manufactured homes meeting FHA standards (Correct answer)
- Any residential property regardless of condition
- Only properties with no existing mortgage
Correct answer: Single-family homes, HUD-approved condos, and manufactured homes meeting FHA standards
Eligible HECM properties include single-family homes, FHA-approved condominiums, and manufactured homes that meet specific HUD requirements.
Question 2: What is the minimum age of a manufactured home to be eligible for a HECM loan?
- Must be built after January 1, 1990
- Must be built on or after June 15, 1976 (Correct answer)
- Must be built after January 1, 2000
- Age is not a determining factor for manufactured homes
Correct answer: Must be built on or after June 15, 1976
Manufactured homes must be built on or after June 15, 1976, when the HUD Code for manufactured housing standards took effect.
Question 3: Which appraisal form is required for a standard single-family HECM property appraisal?
- Fannie Mae Form 1025
- Fannie Mae Form 1004 (URAR) (Correct answer)
- HUD-92051
- Freddie Mac Form 72
Correct answer: Fannie Mae Form 1004 (URAR)
The Uniform Residential Appraisal Report (Fannie Mae Form 1004/URAR) is the standard appraisal form required for single-family HECM properties.
Question 4: What action must be taken if a HECM appraisal reveals required property repairs?
- The loan must be denied
- Repairs must be completed before closing, or funds may be set aside for completion after closing (Correct answer)
- The appraised value is automatically reduced by repair costs
- The borrower receives no funds until repairs are complete
Correct answer: Repairs must be completed before closing, or funds may be set aside for completion after closing
Required repairs may be completed before closing or a repair set-aside can be established to ensure completion within a specified timeframe after closing.
Question 5: What is the maximum loan-to-value impact when a second appraisal is required for a HECM?
- The lower of the two appraisals is used to determine the MCA (Correct answer)
- The average of both appraisals is used
- The higher appraisal is always used to benefit the borrower
- The lender chooses which appraisal to use
Correct answer: The lower of the two appraisals is used to determine the MCA
When HUD requires a second appraisal, the lower of the two appraised values is used as the basis for the Maximum Claim Amount.
Question 6: Which property condition would automatically disqualify a home from HECM eligibility?
- An older roof with minor wear
- Structural deficiencies that pose a safety hazard and cannot be repaired (Correct answer)
- Outdated kitchen appliances
- Absence of a swimming pool
Correct answer: Structural deficiencies that pose a safety hazard and cannot be repaired
Structural deficiencies that pose safety or habitability hazards and cannot be repaired will disqualify a property from HECM eligibility.
CRMP CRMP Property Requirements and Appraisal Standards Questions and Answers 1
Which property types are eligible for a HECM loan?