CRMP Loan Disbursement Options and Payment Plans

Question 1

Which HECM disbursement option provides equal monthly payments to the borrower for as long as they occupy the home as their primary residence?

Accepted Answer

Tenure payment plan

Answer

Term payment plan

Answer

Line of credit

Answer

Modified term plan

Question 2

Under HUD's initial disbursement limit rule, what is the maximum percentage of the available principal limit a borrower may typically draw during the first 12 months?

Accepted Answer

60%

Answer

50%

Answer

75%

Answer

100%

Question 3

A borrower selects a HECM adjustable-rate line of credit and makes no draws for several years. What happens to the unused portion of the line of credit over time?

Accepted Answer

It grows at the same rate as the loan's interest rate plus the annual MIP rate

Answer

It decreases as accrued interest reduces available funds

Answer

It remains static until the borrower makes a draw

Answer

It is forfeited if unused for more than 5 years

Question 4

Which HECM disbursement option is ONLY available with a fixed interest rate product?

Accepted Answer

Single lump sum disbursement

Answer

Tenure payment plan

Answer

Term payment plan

Answer

Line of credit

Question 5

A borrower selects a 'modified tenure' payment plan. What two components does this option combine?

Accepted Answer

A line of credit set-aside with monthly tenure payments

Answer

A lump sum payment with monthly tenure payments

Answer

Monthly term payments with a line of credit

Answer

A lump sum with a line of credit

Question 6

Under the mandatory obligations exception to the 60% initial disbursement limit, a borrower may draw additional funds primarily to:

Accepted Answer

Pay off existing mortgage liens and satisfy other required closing costs

Answer

Pay for home repairs identified during the appraisal

Answer

Fund a simultaneous home purchase under HECM for Purchase

Answer

Pre-pay future property taxes and homeowners insurance

Question 7

Which HECM disbursement option provides equal monthly payments for a specific number of years chosen by the borrower, after which disbursements stop?

Accepted Answer

Term plan

Answer

Tenure plan

Answer

Modified tenure plan

Answer

Line of credit with automatic draws