MRP Financial Analysis for Properties 2

Question 1

A service member using a VA loan purchases a home for $350,000. The VA funding fee is 2.15% for first-time use with no down payment. What is the total funded loan amount if the fee is rolled in?

Accepted Answer

$357,525

Answer

The VA funding fee of 2.15% × $350,000 = $7,525, which when added to the purchase price gives $357,525.

Question 2

Which financial metric best measures a rental property's ability to cover its mortgage payment from operating income?

Accepted Answer

Debt Service Coverage Ratio (DSCR)

Answer

The DSCR compares net operating income to total debt service, directly showing whether property income covers mortgage obligations.

Question 3

A military family rents out their home while on PCS orders for $1,800/month. Annual operating expenses total $6,000. What is the annual net operating income (NOI)?

Accepted Answer

$15,600

Answer

NOI = Gross rental income ($1,800 × 12 = $21,600) minus operating expenses ($6,000) = $15,600.

Question 4

When calculating the break-even ratio for a rental property, which formula is correct?

Accepted Answer

(Operating Expenses + Debt Service) ÷ Gross Potential Income

Answer

The break-even ratio determines what occupancy rate is needed to cover all expenses and debt obligations from gross potential income.

Question 5

A service member receives a BAH of $2,400/month. If the estimated PITI payment on a potential home is $2,100, what is the housing cost differential?

Accepted Answer

+$300 monthly surplus

Answer

BAH of $2,400 minus PITI of $2,100 leaves a $300 monthly surplus, meaning BAH more than covers the housing payment.

(MRP) Military Relocation Professional Practice Test

(MRP) Military Relocation Professional Practice Test

MRP Financial Analysis for Properties 2