Mortgage Products and Programs 5

Question 1

Under the VA loan program, which of the following borrowers is exempt from paying the VA funding fee?

Accepted Answer

Veterans receiving VA disability compensation

Answer

Veterans receiving VA disability compensation are exempt from the VA funding fee, reducing their upfront loan costs.

Question 2

The maximum loan limit for an FHA-insured single-family loan in high-cost areas is set at what percentage of the FHFA conforming loan limit?

Accepted Answer

150%

Answer

FHA high-cost area loan limits are set at 150% of the FHFA conforming loan limit for that area.

Question 3

A 'teaser rate' on an ARM is best described as:

Accepted Answer

A temporarily discounted initial rate below the fully indexed rate

Answer

A teaser rate is an artificially low introductory rate that is below the fully indexed rate (index + margin), used to attract borrowers.

Question 4

Which specialized loan program is backed by the Small Business Administration and can be used to purchase commercial real estate for an owner-operated business?

Accepted Answer

SBA 504 Loan

Answer

The SBA 504 Loan provides long-term, fixed-rate financing for major fixed assets like owner-occupied commercial real estate.

Question 5

Down Payment Assistance (DPA) programs are most commonly administered by:

Accepted Answer

State and local Housing Finance Agencies (HFAs)

Answer

State and local Housing Finance Agencies typically administer DPA programs funded through bond proceeds and federal grants.

Mortgage Practice Test

Mortgage Practice Test

Mortgage Products and Programs 5