Valuation and Financing Practice Question
Question
A buyer and seller disagree about a transaction term involving FHA loans. Which statement best describes FHA loans? (Item 132)
Answer choices
- A. It requires the licensee to favor the other party over the licensee’s own client.
- B. It is primarily a tax rule with no effect on brokerage practice.
- C. It removes the need for written disclosure if the licensee believes the client already knows.
- D. Recognize insured loan concepts and borrower-oriented underwriting features.
Correct Answer
D. Recognize insured loan concepts and borrower-oriented underwriting features.
Explanation
The correct answer is D because FHA loans requires candidates to recognize insured loan concepts and borrower-oriented underwriting features. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: easy
- Domain: Valuation and Financing
- Objective: FHA loans