CRMP - Certified Reverse Mortgage Professional HECM Program and Products Questions and Answers

Question 1

A 65-year-old borrower is interested in a HECM for Purchase to buy a new primary residence. They are selling their current home and will have significant cash proceeds. What is a key feature of the HECM for Purchase program they should understand?

Accepted Answer

The borrower must make a significant down payment using their own funds, with the HECM financing the remainder.

Answer

The HECM for Purchase program allows seniors to buy a new home and get a reverse mortgage in a single transaction. A key requirement is that the borrower must contribute a significant down payment from their own funds (often from the sale of a previous home). The HECM loan then finances the remaining portion of the purchase price.

Question 2

Which of the following is a fundamental eligibility requirement for a borrower to obtain an FHA-insured Home Equity Conversion Mortgage (HECM)?

Accepted Answer

The borrower must occupy the property as their principal residence.

Answer

A core requirement of the HECM program is that the subject property must be the borrower's principal residence, meaning they live there for the majority of the year. While the minimum age is 62, an existing mortgage can be paid off with HECM proceeds, and there is no minimum FICO score required for a HECM.

Question 3

A borrower is deciding between a fixed-rate HECM and an adjustable-rate HECM (ARM). They want the flexibility to access funds in the future as needed, rather than taking all the proceeds at closing. Which HECM product would be the most suitable choice?

Accepted Answer

An adjustable-rate HECM, because it offers a line of credit option.

Answer

Adjustable-rate HECMs offer multiple payout options, including a line of credit that allows borrowers to draw funds as needed. In contrast, a fixed-rate HECM typically requires the borrower to take a single, lump-sum draw at closing.

Question 4

During the Financial Assessment for a HECM loan, what is the primary purpose of evaluating the borrower's credit history?

Accepted Answer

To assess the borrower's willingness and ability to meet future property charge obligations.

Answer

The Financial Assessment's review of credit history is not to qualify based on a score, but to evaluate the borrower's past performance in meeting their financial obligations. This helps the lender determine the borrower's likelihood of paying future mandatory obligations, such as property taxes and homeowner's insurance.

Question 5

A couple, ages 72 and 68, own a four-unit property and live in one of the units as their primary residence. They are interested in a HECM. Which statement accurately describes the eligibility of their property?

Accepted Answer

The property is eligible because it is a 2-4 unit dwelling with one unit occupied by the borrower as their principal residence.

Answer

FHA guidelines permit HECMs on 1-4 unit properties, provided that one of the units is occupied by the borrower as their principal residence. The income from the other units does not disqualify the property.

(CRMP) Certified Reverse Mortgage Professional Practice Test

(CRMP) Certified Reverse Mortgage Professional Practice Test

CRMP - Certified Reverse Mortgage Professional HECM Program and Products Questions and Answers