Use Of Fha Funding For Home Purchase Rising In The Rim

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In years past, rarely did our clients use an FHA (Federal Housing Administration) loan to purchase a home in the Rim Country.

For that matter, prior to our current market, FHA loans only accounted for 5 percent of all home loans nationwide. The Federal Housing Authority was created by the U.S. Government as a way to guarantee loans and protect lenders from losses in the event of a default.

Another goal was to promote home ownership through lending standards that are more relaxed than conventional loans. Test your knowledge of the government’s involvement in the loan process by taking the following quiz.

This quiz is reprinted with permission of the National Association of Realtors, Copyright 2010.

  1. In what year was the Federal Housing Administration (FHA) created? A) 1934. B) 1946. C) 1965. D) 1968.

  2. Which of the following is NOT a requirement for someone applying for an FHA loan? A) Proof of stable income over a two-year period. B) Fewer than two 30-days-past-due payments on a credit report over the past two years. C) A mortgage payment of 30 percent or less of gross income. D) No history of bankruptcy or foreclosure.

  3. What is the FHA’s current, standard down payment requirement? A) 3 percent. B) 3.5 percent. C) 5 percent. D) 10 percent.

  4. Borrowers who have a FICO score of less than 580 must put up what percent down payment to qualify for an FHA loan? A) 3.5 percent. B) 5 percent. C) 10 percent. D) 20 percent.

  5. Right now, the FHA accounts for what percent of the mortgage market? A) 5-15 percent. B) 15-25 percent. C) 25-40 percent. D) 66-75 percent.

  6. The FHA does NOT offer which of the following? A) Adjustable rate mortgages. B) Reverse mortgages. C) Energy efficient mortgages. D) The FHA offers all of these.

  7. What is the limit of an FHA loan? A) $250,000. B) $400,000. C) $500,000. D) Depends on the market of the property being purchased.

  8. How much of a building’s condo units must be owner-occupied for buyers to qualify for a loan to purchase in that building? A) 33 percent. B) 50 percent. C) 75 percent. D) 90 percent.

Answers: 1-A, 2-D, 3-B, 4-C, 5-C, 6-D, 7-D, 8-B

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