Finance
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 market✓ Correct
DOriginated by state-chartered banks in California
Explanation
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.
Related California Finance Questions
- The loan-to-value (LTV) ratio is calculated as:
- What is the Truth in Lending Act (TILA) designed to do?
- A 'purchase money mortgage' is best described as:
- A borrower's debt-to-income (DTI) ratio is calculated by dividing:
- What is the purpose of RESPA (Real Estate Settlement Procedures Act)?
- Which of the following best describes a 'purchase money mortgage'?
- A loan that requires only interest payments during the loan term with the entire principal due at maturity is called a:
- Under conventional lending standards, what is the maximum LTV ratio for a first mortgage on a single-family home that does NOT require private mortgage insurance (PMI)?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →