A buyer earning within the limits wants a USDA loan on a house 3 miles outside a city of 60,000 people. What determines whether this property's location is eligible for USDA guaranteed financing?
Correct Answer
D) Eligibility turns on whether USDA designates that location rural
USDA publishes eligible area maps, and a property qualifies only if it sits in an area the Agency has designated rural; the designation is the test. Other choices: no fixed 3-mile ring from a city defines eligibility, since the designation follows population and area data rather than distance; acreage does not qualify a property and large parcels can raise separate appraisal questions; and the number of outbuildings has nothing to do with area eligibility. Source: 7 CFR 3555.201, rural area designation
Why This Is the Correct Answer
USDA publishes eligible area maps, and a property qualifies only if it sits in an area the Agency has designated rural; the designation is the test. Other choices: no fixed 3-mile ring from a city defines eligibility, since the designation follows population and area data rather than distance; acreage does not qualify a property and large parcels can raise separate appraisal questions; and the number of outbuildings has nothing to do with area eligibility. Source: 7 CFR 3555.201, rural area designation
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Previous Question
A 5/1 ARM starts at a fully indexed rate of 4.25%, consisting of a 1.50% index plus a 2.75-percentage-point margin. It has a 2-percentage-point initial adjustment cap and a 5-percentage-point lifetime cap. At the first adjustment, the index is 3.90%. What is the new interest rate after applying the initial adjustment cap?
Next Question
A covered closed-end $300,000 first-lien conforming mortgage secured by a principal dwelling has an APR 3.1 percentage points above APOR. Points and fees are 2% of the regulatory total loan amount, and there is no prepayment penalty. Which classification follows from these facts?