Finance
A Florida buyer is approved for a USDA Rural Development loan. Which characteristic is MOST associated with this loan type?
AAvailable only in large metropolitan areas
BRequires a 10% down payment minimum
CAvailable for eligible rural and suburban properties with no down payment required✓ Correct
DLimited to borrowers with incomes over $150,000
Explanation
USDA Rural Development loans are available for eligible properties in designated rural and suburban areas. They require no down payment for qualifying borrowers with moderate incomes.
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Key Terms to Know
Private Mortgage Insurance (PMI)
Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Math Concepts
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