Mortgage Products and Programs 3

Question 1

Which government-backed loan program charges both an Upfront Mortgage Insurance Premium (UFMIP) and an annual MIP?

Accepted Answer

FHA loan

Answer

VA loan

Answer

USDA loan

Answer

Conventional loan

Question 2

A construction-to-permanent loan differs from a standalone construction loan because it:

Accepted Answer

Automatically converts to a permanent mortgage after construction

Answer

Requires two closings instead of one

Answer

Does not require inspections during the build phase

Answer

Is only available through the FHA 203(k) program

Question 3

The VA funding fee for a first-time use, no-down-payment purchase by an active-duty veteran is approximately:

Accepted Answer

2.15%

Answer

0.5%

Answer

1.25%

Answer

3.30%

Question 4

An interest-only mortgage allows borrowers to pay only interest for a set period, which means:

Accepted Answer

Monthly payments are lower during the IO period but principal is not reduced

Answer

Principal balance decreases faster

Answer

The loan converts to a HELOC automatically

Answer

The loan is amortized over 15 years instead of 30

Question 5

The FHA 203(k) loan is specifically designed to finance:

Accepted Answer

Purchase and renovation of a home in a single loan

Answer

New construction only

Answer

Investment properties with rental income

Answer

Energy-efficient upgrades after purchase

Question 6

Freddie Mac's Home Possible program allows a minimum down payment of:

Accepted Answer

3%

Answer

0%

Answer

5%

Answer

10%

Question 7

A jumbo loan is defined as a loan that exceeds the:

Accepted Answer

FHFA conforming loan limit

Answer

FHA county loan limit

Answer

VA entitlement ceiling

Answer

USDA area income limit