Certain mortgage loans contain a due-on-sale clause, which gives the lender the right to terminate the loan at sale of the property. Which of the following types of loans is the most likely to contain a due-on-sale clause?

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Quizplus · Accepted Answer

Conventional home loans are the most likely to contain a due-on-sale clause, as they are not backed by the government and are therefore considered higher risk. FHA and VA loans typically have more lenient terms and are backed by the government, making it less likely for them to contain a due-on-sale clause. An assumable home loan may also have a due-on-sale clause, but it depends on the specific terms of the loan agreement.

Certain Mortgage Loans Contain a Due-On-Sale Clause, Which Gives the Lender