Practice Test Geeks(FHA) Federal Housing Administration Appraiser Certification Practice Test
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Financial Analysis & Planning Flashcards

7 cards from real FHA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Analysis & Planning flashcards as text

  1. For FHA appraisal purposes, which factor most directly affects the selection of an appropriate capitalization rate for a single-family rental property?

    Answer: Market risk and comparable sales data

    Cap rates are market-derived from comparable sales and reflect the risk and return expectations of typical investors in that market.

  2. An appraiser is reconciling the income approach and sales comparison approach for a duplex. The income approach indicates $310,000 and the sales comparison indicates $325,000. Under FHA guidelines, what should guide the final reconciliation?

    Answer: The approach best supported by market data and investor behavior

    FHA requires the appraiser to reconcile approaches based on quality of data and how market participants actually value the property.

  3. Which expense is classified as a capital expenditure (CapEx) and should NOT be included in annual operating expenses when developing NOI for an FHA appraisal?

    Answer: Roof replacement costing $18,000

    Roof replacement is a capital expenditure spread over its useful life, not an annual operating expense used to calculate NOI.

  4. A FHA appraiser calculates a stabilized vacancy rate by analyzing local market conditions. Which data source is most appropriate for this analysis?

    Answer: Local rental market surveys and comparable vacancy data

    Market-derived vacancy rates from local surveys and comps are the most credible basis for stabilized vacancy analysis.

  5. In FHA appraisal of income properties, 'effective gross income' (EGI) is calculated as:

    Answer: Potential Gross Income minus vacancy and collection loss plus other income

    EGI = PGI − Vacancy & Collection Loss + Other Income (e.g., parking, laundry).

  6. When appraising a 3-unit FHA property, the appraiser notes that one unit is owner-occupied. How should the income approach treat this unit?

    Answer: Estimate market rent for the owner-occupied unit as if it were rented

    The income approach requires market rent to be estimated for all units, including owner-occupied, to reflect the property's full income potential.

  7. Which financial ratio measures the ability of a property's NOI to cover its annual debt service and is commonly reviewed in FHA multifamily underwriting?

    Answer: Debt Coverage Ratio (DCR)

    The Debt Coverage Ratio (DCR = NOI ÷ Annual Debt Service) measures whether income sufficiently covers mortgage payments.