Valuation and Financing Practice Question
Question
A broker is supervising a transaction file involving FHA loans. Which statement best describes FHA loans? (Item 32)
Answer choices
- A. It is controlled only by local custom rather than by law, contract, or professional duty.
- B. It is valid only when the buyer pays cash and no lender is involved.
- C. It prevents any later disclosure, even when new facts become known.
- 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