Valuation and Financing Practice Question
Question
An investor is comparing two properties involving FHA loans. Which statement best describes FHA loans? (Item 52)
Answer choices
- A. It is optional whenever both parties verbally agree to proceed.
- B. It allows a salesperson to act independently of the responsible broker.
- C. It shifts all responsibility to escrow and eliminates the broker’s duties.
- 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