CRU Residential Mortgage Products & Guidelines 3

Question 1

A VA loan's funding fee for a first-time use, active-duty veteran with a 5% down payment on a purchase transaction is:

Accepted Answer

1.65%

Answer

For a first-time VA borrower putting 5% to 9.99% down on a purchase, the funding fee is 1.65% of the loan amount.

Question 2

Under USDA Rural Development guidelines, which of the following income types must be included when calculating the household income threshold for eligibility?

Accepted Answer

Income of all adult household members, whether or not they are on the loan

Answer

USDA uses total household income from all adult members (18+) to determine eligibility against the area median income limit, regardless of who signs the note.

Question 3

Which scenario would most likely require a borrower to use the lesser of purchase price or appraised value when calculating LTV?

Accepted Answer

A purchase where the appraisal exceeds the purchase price

Answer

On a purchase transaction, LTV is calculated on the lesser of the appraised value or purchase price; if the appraisal exceeds the purchase price, the purchase price is used.

Question 4

A Jumbo loan differs from a conforming loan primarily because it:

Accepted Answer

Exceeds the FHFA conforming loan limits and cannot be purchased by Fannie Mae or Freddie Mac

Answer

Jumbo loans exceed the conforming loan limits set by the FHFA and therefore cannot be sold to Fannie Mae or Freddie Mac without special agreements.

Question 5

A borrower is purchasing a home under an FHA loan. The property appraises at $300,000 and the purchase price is $295,000. The maximum base loan amount FHA will insure is based on:

Accepted Answer

$295,000

Answer

FHA calculates the maximum insurable loan amount using the lesser of the appraised value or purchase price, which in this case is $295,000.

(CRU) Certified Residential Underwriter Practice Test

(CRU) Certified Residential Underwriter Practice Test

CRU Residential Mortgage Products & Guidelines 3