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Mortgage > FHA > Flashcards

FHA Flashcards

1
Q

What does FHA stand for?

A

Federal Housing Administration

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2
Q

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

A

True

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3
Q

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

A

3.5%

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4
Q

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

A

federal

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5
Q

Which type of mortgage insurance is required for FHA loans?

A

Mortgage Insurance Premium (MIP)

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6
Q

What is the maximum loan amount for FHA loans?

A

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

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7
Q

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

A

False

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8
Q

What is the primary purpose of the FHA?

A

To facilitate home ownership by providing affordable mortgage options.

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9
Q

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

A

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

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10
Q

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

A

B) No mortgage insurance

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11
Q

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

A

To protect lenders against losses when borrowers default.

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12
Q

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

A

False

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13
Q

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

A

first-time homebuyers

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14
Q

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

A

43%

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15
Q

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

A

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

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16
Q

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

A

False

17
Q

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

A

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

18
Q

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

A

A) Proof of income

19
Q

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

A

home

20
Q

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

A

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

21
Q

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

A

True

22
Q

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

A

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

23
Q

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

A

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

24
Q

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

A

A) Fixed interest rates

25
Q

What is the role of an FHA-approved lender?

A

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

26
Q

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

A

mortgage

Mortgage (3 decks)

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