FinanceIntermediateDelaware Exam
What is a 'conforming loan' in the U.S. mortgage market?
AA loan that conforms to FHA guidelines
BA loan that meets Fannie Mae/Freddie Mac guidelines for purchaseCorrect
CA loan issued by a state-chartered bank
DA loan with an interest rate at or below the prime rate
Why A loan that meets Fannie Mae/Freddie Mac guidelines for purchase Is Correct
Answer B: A loan that meets Fannie Mae/Freddie Mac guidelines for purchase
A conforming loan meets the underwriting guidelines and loan limits established by Fannie Mae and Freddie Mac, allowing it to be sold in the secondary mortgage market.
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.
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