California Real Estate Practice Exam

FHA down payment requirements for a new loan on an appraised value of $87,500 are 3% on the first $25,000 and 5% on the remainder. What is the total loan amount?

1. $87,500

2. $83,625

3. $84,338

4. $84,125

The correct answer is: $87,500

To determine the total loan amount for an FHA loan with specified down payment requirements, it's essential to calculate the amount that needs to be paid upfront as down payment and then subtract that from the appraised value of the property. Under FHA guidelines, for an appraised value of $87,500, the down payment is structured as follows: 1. The first $25,000 of the appraised value requires a 3% down payment: - 3% of $25,000 = $750. 2. The remainder of the appraised value is $87,500 - $25,000 = $62,500, which requires a 5% down payment: - 5% of $62,500 = $3,125. Now, summing both down payment amounts gives the total down payment due: - Total down payment = $750 + $3,125 = $3,875. To find the total loan amount, subtract the total down payment from the appraised value: - Total loan amount = $87,500 - $3,875 = $83,625. This calculation leads to the understanding that the total loan amount would be $83,625, making that the correct response. The confusion in