Deck 8: Federal Government Underwriting Programs

Question 1

In the language of HUD/FHA, "upfront mortgage insurance premium" specifically means:

A) any FHA mortgage insurance premium
B) a monthly premium charged for default insurance
C) the insured commitment
D) a premium charged that is paid in full (or added to the loan amount) at the time of closing

Answer 1

a premium charged that is paid in full (or added to the loan amount) at the time of closing

Question 2

An assumption of a VA loan made for loans originated after March 1, 1988 without approval of the lender or the VA can result in

A) criminal action taken against the seller
B) no action because the loan can be freely assumed
C) an immediate acceleration of the note payable
D) no Action if the payments are made timely for the next five years

Answer 2

an immediate acceleration of the note payable

Question 3

Which of the following cash required to close rules apply to an FHA mortgage?

A) Cash required may be added to loan amount
B) 3.5% cash required may be cover by down payment plus closing costs
C) 3.5% cash must be paid as down payment
D) Only required down payment must be in cash

Answer 3

3.5% cash required may be cover by down payment plus closing costs

Question 4

FHA loans originated on or after December 15, 1989 are restricted to which of the following assumption policies?

A) Freely assumable but seller remains liable
B) Cannot be assumed for first five years of mortgage obligation
C) New buyer must be approved by FHA prior to title transfer
D) No assumptions are permitted

Question 5

The amount of a VA home loan guarantee (veteran's entitlement) is calculated

A) the same as a HUD/FHA insured commitment.
B) at a flat $27,500 regardless of loan amount
C) at 90% of the Certificate of Reasonable Value
D) on a sliding scale based on a decreasing percentage of the loan amount

Question 6

To qualify property to be pledged as collateral for a VA guaranteed loan, it must meet VA standards as determined by

A) written affidavit of the veteran seller
B) inspection and approval of the lender's agent
C) any approved VA builder
D) a VA approved appraiser

Question 7

Which FHA Program Section has been phased out and is now covered by FHA's Section 203(b) program with higher restrictions on collateral approval?

A) Section 354
B) Section 203(k)
C) Section 234(d)
D) Section 1492

Question 8

When a VA loan has been properly assumed, a veteran has a right to a release of liability upon meeting all of the following requirements EXCEPT

A) loan must be currently paid
B) property must be sold to another veteran
C) purchaser must be qualified to buy
D) purchaser must agree to assume the loan

Question 9

The Federal Housing Administration implements its programs with which of the following procedures?

A) Providing government bonds as collateral for loans
B) Issuing an insured commitment covering the loan
C) Funding a portion of each loan at closing
D) Guaranteeing a portion of each loan

Question 10

Loan Limits Based on Geographic Location for FHA loans are now established under two laws, which of the following has generally had the lower loan limits?

A) Housing and Economic Recovery Act of 2008
B) American Recovery and Reinvestment Act of 2009
C) Economic Stimulus Act of 2008
D) Housing Recovery Act of 2010

Question 11

Which of the following Federal legislation gives Veterans who were forced to relocate from having to take a loss on the sale of their home due to a drop in fair value?

A) Economic Stimulus Act of 2008
B) American Recovery and Reinvestment Act of 2009
C) VA Home Equity Conversion
D) Housing and Economic Recovery Act in 2008

Question 12

Under FHA procedures, all of the following are considered prepaid items EXCEPT:

A) down payment
B) property taxes
C) hazard insurance
D) mortgage default insurance