FHA Financial Analysis & Planning 2

Question 1

An FHA appraiser is analyzing a property with a gross monthly rent of $2,400. Using the Gross Rent Multiplier (GRM) method and a market GRM of 140, what is the indicated value?

Accepted Answer

$336,000

Answer

GRM × Monthly Rent = Value; 140 × $2,400 = $336,000.

Question 2

When calculating Net Operating Income (NOI) for an FHA appraisal, which of the following is NOT deducted from Effective Gross Income?

Accepted Answer

Mortgage debt service

Answer

Mortgage debt service is a financing expense deducted below NOI, not from EGI to arrive at NOI.

Question 3

A property has a potential gross income of $60,000, a vacancy and collection loss of 8%, and operating expenses of $22,000. What is the NOI?

Accepted Answer

$33,200

Answer

EGI = $60,000 × 0.92 = $55,200; NOI = $55,200 − $22,000 = $33,200.

Question 4

In FHA appraisal for income properties, the overall capitalization rate is best described as:

Accepted Answer

The ratio of NOI to property value

Answer

The overall cap rate (OAR) equals NOI divided by property value and reflects the entire property's income return.

Question 5

Which FHA guideline addresses the requirement that an appraiser must analyze the subject property's income potential relative to its market area when appraising a two- to four-unit property?

Accepted Answer

HUD Handbook 4000.1

Answer

HUD Handbook 4000.1 governs FHA single-family appraisal requirements including income analysis for small income properties.

(FHA) Federal Housing Administration Appraiser Certification Practice Test

(FHA) Federal Housing Administration Appraiser Certification Practice Test

FHA Financial Analysis & Planning 2