Chapter 03

Question 1

Modular Home aka prefab homes

Answer 1

A home built somewhere else and then assembled at a property

Question 2

National flood insurance act

Answer 2

• Subsidizes flood insurance

- Is administered my FEMA

Question 3

Ownership expenses and the ability to pay

Answer 3

• PITI must not exceed 28%

- PITI plus long term debt must not exceed 36%

Question 4

Investment Considerations

Answer 4

• Property may increase in value
• As mortgage is payed down, more of the home is owned
• Tax benefits

Question 5

Tax Deductions

Answer 5

• Mortgage interest on 1st and 2nd properties ( if mortgage is balance is below 1 million for a married couple, or 500,000 for individual
• Real Estate Tax (excluding interest on late payments)
• Certain loan origination fees
• Points
• Prepayment penalties

Question 6

High-rise Development aka Mixed use Development or MUDs

Answer 6

A mixture of residential and commercial properties into one vertical development

Question 7

Planed unit developments aka master-planed communities or PUDs

Answer 7

A planned combination of diverse land use such as recreational, commercial, and residential in on contained development or subdivision.

Question 8

Manufactured homes

Answer 8

Mobil homes

Question 9

Comprehensive loss underwriting exchange

Answer 9

A database of consumer claims shared by insurance companies

Question 10

Home owner insurance types

Answer 10

• Basic form ( most common)

- Broad form ( Covers more threats due to cold weather

Question 11

Coinsurance Clause

Answer 11

Owner will maintain coverage equal to a specific percentage (usually 80%) of the replacement cost of dwelling ( not the land)
Then owner can claim 100% of replacement cost without deduction or depreciation