P4-44 Quiz

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Question 1 of 9

1. Question
How should government bonds be valued when used as a source of funds to close?
- A. At their current market value only
- B. At their redemption value only
- C. At their purchase price unless the redemption value can be determined and verified, with receipt of funds verified
- D. At the lowest value between purchase price and market value
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Question 2 of 9

2. Question
What documentation is required to verify the value of stocks used as funds to close?
- A. A verbal confirmation from the borrower
- B. A prior year tax return showing stock ownership
- C. A current statement from the stockbroker or a stock certificate with a dated newspaper stock list, and verification of receipt of funds
- D. Only a screenshot of the borrower’s online trading account
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Question 3 of 9

3. Question
When may funds from a trust account be used to satisfy cash-to-close requirements?
- A. When the borrower is listed as a beneficiary
- B. When the borrower has access to the funds and that access can be verified
- C. Only when the trust is revocable
- D. Only after funds are distributed
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Question 4 of 9

4. Question
How is cash-on-hand treated as a source of funds for down payment or closing costs?
- A. Acceptable with a written explanation
- B. Acceptable if deposited prior to closing
- C. Acceptable for closing costs only
- D. Not an acceptable source of funds
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Question 5 of 9

5. Question
Under what condition may a property seller accept a borrower’s existing property as trade equity for a down payment?
- A. When the borrower provides no cash down payment
- B. When the borrower provides a 5% cash down payment and the equity contribution reflects true value
- C. When the trade value exceeds the appraised value
- D. When the lender waives appraisal requirements
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Question 6 of 9

6. Question
What additional documentation is required when trade equity is used toward a down payment?
- A. A verbal confirmation from the seller
- B. A broker price opinion only
- C. A separate written appraisal and a land records search to verify ownership and liens
- D. Only a settlement statement
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Question 7 of 9

7. Question
When may excess rent payments be applied toward a borrower’s down payment?
- A. When the lease term is at least six months
- B. When the rental payment exceeds market rent and there is a valid rental/purchase agreement with a minimum 12-month lease and documented payments
- C. When the borrower provides canceled checks for three months
- D. When the seller agrees verbally
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Question 8 of 9

8. Question
How is sweat equity treated by Fannie Mae and Freddie Mac?
- A. Accepted by both agencies without restriction
- B. Not accepted by either agency
- C. Accepted by Fannie Mae but not Freddie Mac
- D. Not accepted by Fannie Mae, but permitted by Freddie Mac with a 5% cash investment
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Question 9 of 9

9. Question
When may borrowed funds be used as funds to close?
- A. Only when unsecured
- B. Only when repayment is included in qualifying ratios
- C. When the funds are secured by an asset and represent a return of equity
- D. Only when borrowed from a family member
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