FHA

Question 1

What does FHA stand for?

Answer 1

Federal Housing Administration

Question 2

True or False: FHA loans are designed for low to moderate-income borrowers.

Answer 2

True

Question 3

What is the minimum down payment required for an FHA loan?

Answer 3

3.5%

Question 4

Fill in the blank: FHA loans are backed by the _____ government.

Answer 4

federal

Question 5

Which type of mortgage insurance is required for FHA loans?

Answer 5

Mortgage Insurance Premium (MIP)

Question 6

What is the maximum loan amount for FHA loans?

Answer 6

Varies by county and is determined by the area median income.

Question 7

True or False: FHA loans can only be used for first-time homebuyers.

Answer 7

False

Question 8

What is the primary purpose of the FHA?

Answer 8

To facilitate home ownership by providing affordable mortgage options.

Question 9

What credit score is typically required to qualify for an FHA loan?

Answer 9

A minimum credit score of 580 for the 3.5% down payment option.

Question 10

Multiple Choice: Which of the following is NOT a benefit of FHA loans? A) Lower down payment B) No mortgage insurance C) Higher credit limits

Answer 10

B) No mortgage insurance

Question 11

What is the purpose of the FHA’s mortgage insurance?

Answer 11

To protect lenders against losses when borrowers default.

Question 12

True or False: FHA loans are available for investment properties.

Answer 12

False

Question 13

Fill in the blank: FHA loans are primarily aimed at helping _____ purchase homes.

Answer 13

first-time homebuyers

Question 14

What is the maximum debt-to-income ratio typically allowed for an FHA loan?

Answer 14

43%

Question 15

What type of properties can be financed with an FHA loan?

Answer 15

Single-family homes, multi-family homes (up to four units), and certain condos.

Question 16

True or False: FHA loans require a higher interest rate compared to conventional loans.

Answer 16

False

Question 17

What is the purpose of the FHA’s streamline refinancing program?

Answer 17

To make it easier for existing FHA borrowers to refinance their loans.

Question 18

Multiple Choice: Which of the following is a common requirement for FHA loans? A) Proof of income B) 20% down payment C) No credit check

Answer 18

A) Proof of income

Question 19

Fill in the blank: FHA loans are designed to promote _____ ownership.

Answer 19

home

Question 20

What is the impact of a borrower’s credit score on FHA loan eligibility?

Answer 20

A higher credit score can lead to better terms and lower mortgage insurance costs.

Question 21

True or False: FHA loans can be used for home improvement projects.

Answer 21

True

Question 22

What documentation is typically required to apply for an FHA loan?

Answer 22

Tax returns, W-2s, bank statements, and proof of employment.

Question 23

What is the FHA’s Home Equity Conversion Mortgage (HECM)?

Answer 23

A reverse mortgage program for seniors that allows them to convert home equity into cash.

Question 24

Multiple Choice: Which of the following is a key characteristic of FHA loans? A) Fixed interest rates B) Adjustable interest rates C) No income verification

Answer 24

A) Fixed interest rates

Question 25

What is the role of an FHA-approved lender?

Answer 25

To originate and service FHA loans in accordance with FHA guidelines.

Question 26

Fill in the blank: FHA loans help to reduce the risk for lenders by providing _____ insurance.

Answer 26

mortgage