In Colorado, buyers of property in a 'Special Flood Hazard Area' (SFHA) on FEMA maps are required to:
Why B. Purchase flood insurance as a condition of obtaining a federally backed mortgage loan, as required by the National Flood Insurance Program (NFIP) Is Correct
Answer B: B. Purchase flood insurance as a condition of obtaining a federally backed mortgage loan, as required by the National Flood Insurance Program (NFIP)
Exam Tip: Environmental
Environmental questions test knowledge of hazards like asbestos, lead-based paint, radon, and mold. Know the disclosure requirements and when a professional inspection is required. CERCLA liability is strict, joint, and several.
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Key Terms to Know
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
State-Specific Concepts
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