Mortgage Products and Programs 4

Question 1

Which index is most commonly used as the basis for adjustable-rate mortgage adjustments in the United States?

Accepted Answer

SOFR

Answer

The Secured Overnight Financing Rate (SOFR) replaced LIBOR as the primary benchmark index for new U.S. ARM products.

Question 2

A reverse mortgage allows eligible homeowners aged 62 or older to:

Accepted Answer

Convert home equity into loan proceeds without a required monthly payment

Answer

A reverse mortgage (typically a HECM) lets seniors access home equity as cash, a line of credit, or monthly advances with no required monthly repayment.

Question 3

Which conventional loan program is specifically designed for manufactured housing and allows a 3% down payment?

Accepted Answer

Both A and C

Answer

Both Fannie Mae's MH Advantage and Freddie Mac's CHOICEHome allow 3% down payment for qualifying manufactured homes with site-built features.

Question 4

The 'Good Neighbor Next Door' program offers a 50% discount on the list price of HUD homes for eligible buyers who are:

Accepted Answer

Teachers, law enforcement officers, firefighters, and EMTs

Answer

The HUD Good Neighbor Next Door program offers a 50% listing price discount to teachers, law enforcement officers, firefighters, and emergency medical technicians in revitalization areas.

Question 5

A lender who holds originated loans in their own portfolio rather than selling them on the secondary market is called a:

Accepted Answer

Portfolio lender

Answer

Portfolio lenders retain loans on their own balance sheet, allowing more flexible underwriting outside agency guidelines.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Products and Programs 4