A borrower is applying for a USDA Rural Development loan. Which of the following best describes the primary eligibility requirement for the property location?
Correct Answer
C) The property must be located in a designated rural area as defined by USDA
USDA Rural Development loans require the property to be located in a USDA-designated rural area. These areas are specifically defined by USDA and may include some suburban areas and towns with populations under 35,000. The designation is not simply based on city limits or distance from metropolitan areas.
Why This Is the Correct Answer
USDA Rural Development loans require the property to be located in a USDA-designated rural area. These areas are specifically defined by USDA and may include some suburban areas and towns with populations under 35,000. The designation is not simply based on city limits or distance from metropolitan areas.
More Mortgage Knowledge Questions
A borrower refinances their home with a cash-out refinance loan of $750,000. The original loan balance was $400,000, and they're taking $300,000 in cash. If conforming limits allow $766,550, how is this loan classified?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
Under TRID regulations, discount points must be disclosed on the Loan Estimate in which section?
A borrower is refinancing a $350,000 property. The existing first mortgage balance is $200,000, and they want to take $75,000 cash out. What will be the new LTV ratio?
During the draw period of a HELOC, what type of payments are borrowers typically required to make?
A borrower submits a loan application but fails to provide their Social Security number, claiming privacy concerns. The MLO has obtained the borrower's name, income, estimated property value, loan amount, and property address. According to TRID regulations, what is the status of this submission?
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A borrower's homeowners insurance policy is cancelled mid-term due to non-payment, but the escrow account shows the premium was paid. Investigation reveals the insurance company applied the payment to a different policy number. What should the servicer do?
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Previous Question
On the URLA Form 1003, Section I asks about the borrower's intended occupancy. A borrower indicates they will use the property as a primary residence but mentions they travel extensively for work and will only be home 3-4 months per year. What additional documentation should the MLO request?
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