FinanceIntermediateCalifornia Exam

The conforming loan limit determines which loans can be:

AInsured by the FHA
BGuaranteed by the VA
CPurchased by Fannie Mae and Freddie Mac on the secondary marketCorrect
DOriginated by state-chartered banks in California

Why Purchased by Fannie Mae and Freddie Mac on the secondary market Is Correct

Answer C: Purchased by Fannie Mae and Freddie Mac on the secondary market

Conforming loan limits set the maximum loan amount that Fannie Mae and Freddie Mac can purchase. Loans above this limit are 'jumbo' loans and typically carry higher rates and stricter underwriting standards since they cannot be sold to these GSEs.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

People Also Study

Practice More California Real Estate Questions

1,500+ questions covering all exam topics. Start free — no signup required.

Take the Free California Quiz →