FHA, VA, USDA

Question 1

Who insures FHA and guarantees VA and USDA loans?

Answer 1

The Government National Mortgage Association (GNMA)

Question 2

Ginnie Mae buy, sell or issue mortgage backed securities?

22-1

Answer 2

No

Question 3

What’s the late fee for all the government mortgages (FHA, VA, USDA)?

Answer 3

4% of the principal and interest (P&I ONLY)

Question 4

The Federal Housing Administration (FHA) is part of what government agency?

Answer 4

U.S. Department of Housing and Urban Development (HUD)

Question 5

With Federal Housing Administration (FHA) loans. Monthly Insurance Premium (MIP) protects lenders from what?

Answer 5

Protects lenders against losses if a property owner defaults on their mortgage. This will allow the lender to get paid back for the unpaid principal balance.

Question 6

With FHA loans, What does MIP stand for?

Answer 6

Mortgage Insurance Premium

Question 7

How long must the borrower pay Monthly Insurance Premium (MIP) for?

Answer 7

MIP is for the life of the loan unless the borrower keeps an LTV of 90 percent or less for 11 years straight, meaning you must put 10% down to start and you must hold that LTV for 11 years.

Question 8

What percentage of the loan amount does the borrower have to pay for UFMIP for FHA?

Answer 8

1.75% of the loan amount.

Question 9

What is The Federal Housing Administration (FHA) Automated Underwriting system (AUS) called?

Answer 9

Total Score Card

Question 10

What is The Federal Housing Administration (FHA) front end and back end ratios?

Answer 10

31/43%

Question 11

What is the maximum amount a seller can contribute towards the borrower’s closing cost for an FHA loan?

Answer 11

6% of the lower of the sale price or appraisal price.

Question 12

What is the required minimum down payment amount for a FHA loan?

Answer 12

● Credit score of at least 580 = 3.5% down payment ● Credit score between 500 and 579 = 10% down payment ● Credit score under 500 = can not get an FHA loan

Question 13

If the borrower is purchasing a home being sold within ______ days, the borrower is ineligible to use an FHA loan

Answer 13

90 days

Question 14

With a FHA loan If the property is sold within 91-180 days. What is required?
And what happens if it sold 180-1y?

Answer 14

A second FHA independent appraisal is required and CAN NOT be charged to the borrower. If the property is sold 180 days to 1 year is subject to additional review to establish value.

Question 15

Within how many days of signing the mortgage must the borrower reside on the property with an FHA loan?

Answer 15

60 days

Question 16

With an FHA loan the borrower can not resell the property for how long?

Answer 16

90 days

Question 17

For FHA loans, In order to rent the property as an investment it must be the borrower’s primary residence for how long?

Answer 17

At least 1 year

Question 18

To prevent potential flipping schemes, FHA requires lenders to look back on the transfer history of a property for the past how many years prior to resale?

Answer 18

3 years

Question 19

What is a FHA loan 203(b)?

Answer 19

Basic Fixed Rate Home Mortgage Loan, is the most common of all FHA mortgage insurance programs for one to four unit residential properties.

Question 20

What is a FHA loan 203(k)?

Answer 20

Renovation Mortgage Loan, It provides home buyers or homeowners the option to borrow sufficient funds to address both the cost of the property and repairs which are desired or needed. These loans can be a 15 or 30-year fixed-rate mortgage.

Question 21

What is a FHA loan 203(g)?

Answer 21

Good Neighbor Next Door Mortgage Loan is offered to law enforcement officers, teachers (pre-Kindergarten through 12th grade), firefighters, and emergency medical technicians. An eligible buyer must commit to live in the property for 36 months as his/her principal residence. HUD offers a substantial incentive in the form of a discount of 50% from the appraised value of the home.

Question 22

What is a FHA loan 234(c)?

Answer 22

Condominium Mortgage Loans are designed to encourage lenders to extend affordable mortgage credit to those purchasing condominiums. This program ensures a loan for 30 years to purchase a unit in a condominium building.

Question 23

What is a FHA loan 245?

Answer 23

Graduated Payment Mortgage (GPM) are designed for those who have lower incomes available to purchase a home and make mortgage payments that will grow along with their earning potential. This mortgage is for people who will be making more money in the future. Think of college graduates. This loan starts off negatively amortized, but as the payments increase each year, it becomes fully amortized by the end.

Question 24

What is a FHA loan 245(a)?

Answer 24

Growing Equity Mortgage (GEM) allows homeowners who are interested in further reducing the term of their mortgage to apply scheduled increases in their monthly payments to the outstanding principal balance. This loan starts off fully amortized, but as the payments increase each year, it becomes positively amortized by the end. Resulting in paying the loan off early.

Question 25

What is a FHA loan 251?

Answer 25

Adjustable Rate Mortgage Loan (ARM) FHA insures home purchases or loan refinances on loans with interest rates that may increase or decrease over time but helps keep the initial costs down.

Question 26

What is a FHA loan 255?

Answer 26

Home Equity Conversion Mortgage (HECM). A reverse mortgage product that allows seniors age 62 and over to convert equity in their primary residence to cash.

Question 27

What’s the most common FHA Streamline Refinance?

Answer 27

Non-credit qualifying streamline refinance requires the lender to still check your credit, but they consider fewer factors within your credit report. For a non-credit qualifying refinance, your lender may not need to verify your income. This makes for a faster, easier approval process. No appraisal is required.

Question 28

What is an Energy Efficient Mortgage (EEM)?

Answer 28

Loans to purchase or refinance homes and make energy-efficient improvements. An energy-efficient mortgage allows you to fully pay for and finance energy-efficient improvements under favorable terms.

Question 29

What is a Temporary 2-1 buydown?

Answer 29

A mortgage agreement that provides the borrower with a lower interest rate for the first two years of the loan. First year it lowers the interest rate by 2% ,Second year lowers the interest rate by 1%, then goes back to its full note rate by year three. For example, if the note rate is 6%, the first year would be 4%, the second year would be 5%, and the third year it would go back to 6%.

Question 30

What is a Certificate of Eligibility (COE)?

Answer 30

VA Loans require the borrower to submit a Certificate of Eligibility (COE), It confirms to the lender that the borrower qualifies for the VA home loan benefit and how much their entitlement is or remaining.

Question 31

On loan amounts over $144,000, how much does the VA guarantee if a borrower has a full entitlement?

Answer 31

VA guarantees 25% of the loan amount.

Question 32

What's the front and back end DTI for VA Mortgage?

Answer 32

Back end of 41% (no front end), which can vary based on residual income.

Question 33

What is Residual income?

Answer 33

It’s the amount of money which is left over each month after paying your monthly expenses.

Question 34

If the borrower has already used part of their entitlement, the remaining entitlement is based on what?

Answer 34

The county loan limit, this means that if the borrower defaults on their loan, the VA will pay the lender up to 25% of the county loan limit. Take the county loan limits minus the amount of the entitlement that was already used.

Question 35

What is the VA Loan one-time nonrefundable variable funding fee?

Answer 35

2.15% (3.3% for subsequent)

Question 36

When is the funding fee for VA waived for the Veteran?

Answer 36

● Surviving spouse ● Disabled veteran ● Purple heart

Question 37

With a VA Loan, what is a DD-214?

Answer 37

(discharge papers or report of separation) is required if the veteran has been discharged from the military and is issued by the Department of Defense.

Question 38

With a VA loan, what is the NGB form 22?

Answer 38

Is for members of the National Guard who need to prove that they’ve served for at least six years.

Question 39

With a VA loan, what is the NGB form 23?

Answer 39

Is for if the veteran is no longer in the military. It gives proof of where they stand in respect to retirement.

Question 40

With a VA loan, what is the Certificate of Reasonable Value (CRV)?

Answer 40

Determines the maximum value of the property. Once the COE is submitted to the lender, the appraisal of the property is ordered and the VA appraiser will provide the Certificate of Reasonable Value to the lender once the appraisal is completed.

Question 41

With a VA loan, what is the Notice of Value (NOV)?

Answer 41

The NOV will inform the Veteran about the results of the appraisal report and conditions that must be met for guarantee of the loan.

Question 42

The VA allows lenders to charge up to what % of the loan amount to cover origination, processing and underwriting costs?

Answer 42

1% of the loan amount

Question 43

Borrowers with income of up to what % of the area median may be eligible for 30-year guaranteed loans?

Answer 43

115% of the area median

Question 44

What's the minimum down payment for a USDA loan?

Answer 44

No down payment/100% financing.

Question 45

USDA loans do have a one time funding fee of what %?

Answer 45

1% that is paid at closing or can be included in the loan.

Question 46

What is the max debt-to-income ratio for USDA?

Answer 46

29% front end/41% back end

Question 47

What is the USDA Automated Underwriting System (AUS) called ?

Answer 47

Guaranteed Underwriting System (GUS).