HUD Exam Study Flashcards
This is a home loan, which is a line of credit from which you can borrow at any time during the draw period, up to your credit limit. Typically, the draw period is 10 years, and the repayment period lasts 15 years. This is generally offered at a variable rate and payments are typically interest-only during the draw period
This may be right for you if:
• Your home improvement plan consists of multiple
expenses that may be paid over an extended period
of time
• You do not have funds available for significant closing
costs
Home Equity Line of Credit (HELOC)
A loan through the FHA program that permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. It may be used in conjunction with the Energy Efficiency Mortgage program to make energy efficient improvements.
This program loan may be right for you if:
• You would like to carry out a minor rehabilitation
and/or home improvement project that will not
require the involvement of consultants, engineers,
and/or architects.
• Your proposed projects meet the qualifications set
forth by the FHA.
• You intend to use one or more contractors to
complete the repairs or can prove that you have the
necessary expertise and experience to perform the
work.
• You can complete the project within six months.
FHA Streamlined 203k Loan
An insurance premium of_____ that is collected on FHA loans. This can be paid at the time the loan closes or rolled into the mortgage payments. It is in addition to ongoing mortgage insurance premium payments.
1.75%
This is one of the four Cs of credit that describes the assets that a lender can take possession of if a borrower defaults on his/her loan. Thus, if you fail to repay the loan, is there something of value that you agree to forfeit? For example, if you’re buying your first car, it would be collateral to ensure that you will repay the loan. If you default, you lose the car.
Collateral
Under the FHA loan program what are the front end and back end ratios?
- Front end: 31%
* Back end: 43%
Under the Conventional Mortgage loan program what are the front end and back end ratios?
- Front end: 28%
* Back end: 36%
This is one of the four Cs of credit known as the “common sense” factor that lenders look at when considering a loan application.
It is your reputation as a borrower. Lenders look at your history and financial stability in the past to get a sense of how responsible you have been and how responsible you are likely to be in the future.
Character
What is your ability to repay the loan? Do you have a job or another income source? Have you held your job for a length of time? Do you have other debts?
Capacity
Under the FHA Energy Efficient Mortgage loan program what are the front end and back end ratios?
- Front end: 33%
* Back end: 45%
This is a loan insured by the FHA. It can provide you with an initial loan for purchasing a home as well as funding for home improvement.
This product may be right for you if:
• You plan to purchase a home that needs major
repairs.
• You own a home and want to refinance to conduct
major repairs.
• The home and repairs meet the qualifications
set forth by the FHA.
FHA 203k Loan
Under the HUD Affordable Rental program what are the front end and back end ratios?
- Front end: 30%
* Back end: 36%
This type of product assists individuals to purchase an energy efficient home or refinance a home to make energy efficient improvements. Although the additional expense of a cost-effective energy package may be financed into an this type of mortgage, the loan is initially underwritten as if the energy package did not exist. This means that the borrower does not need to qualify for additional financing or provide a higher down payment. In addition to conventional EEM options, EEMs can be insured through either the FHA or the Department of Veterans Affairs.
This loan may be right for you if:
• You would like to obtain a larger loan amount than
you qualify for in order to make energy efficient
improvements to your home.
• You desire to buy a larger and more energy efficient
home.
• You, the home, and the improvements meet the
qualifications as set forth by the FHA or other
financing body
An Energy Efficient Mortgage
This is one of the four Cs of credit that defines both Cash and Reserves of a person, thus how much someone is worth. These things could be savings account, car, or share certificate you could use to repay the debt
Capital
These loans are insured by the FHA, may be used for alterations, repairs, and site improvements on single family homes and for alterations and repairs on multifamily homes. These loans can be used in connection with a 203k Rehabilitation Mortgage.
This type of loan may be right for you if:
• You are the owner of the property to be improved,
the person leasing the property (provided that the
lease will extend at least six months beyond the date
when the loan must be repaid), or someone
purchasing the property under a land installment
contract.
• You want a fixed interest rate.
• You desire a loan of up to $25,000 for improving a
single-family home or for improving or building a
nonresidential structure.
• You desire a loan of up to $12,000 per family unit,
not to exceed a total of $60,000, for improving a
multifamily structure.
Title 1 Loans
This is a loan provides a lump sum of money. It is often referred to as a second mortgage, because it can be obtained while you are still bound to your initial mortgage. Terms can range from 5 to 30 years at a fixed interest rate.
This type of loan may be right for you if:
• Your home improvement plan consists of a large
one-time expense.
• You want a fixed rate for your monthly payments.
• You do not have funds available for significant
closing costs
Home Equity Loan
