HUMBER REAL ESTATE EXAMS SCRIPT 2026/2027
QUESTIONS AND ANSWERS RATED A+
✔✔Bridge Loan - ✔✔A short-term loan for borrowers who need more time to find
permanent financing.
EX: a buyer is waiting on a sale for funds and the lender gives short-term financing until
transaction closes
✔✔Gap Loan - ✔✔EX: a developer is receiving 4 advances from a lender at specific
points during construction. A gap loan can be used to "fill the financing gap" between
each advance
✔✔Development Loan - ✔✔Lender advances the funds as a collateral loan (usually
interest only payments) until the loan can be paid out from sale proceeds
✔✔Collateral Loan - ✔✔Loan is guaranteed with owned assets
✔✔Standby Loan - ✔✔Short term loan (high interest rate) that provides a developer
with flexibility to get a project underway before finding more favourable long-term
financing
✔✔Wraparound Mortgage - ✔✔When there is a favourable mortgage that can be
assumed, a second mortgage can be obtained to supply extra financing while still
benefiting from the original mortgage
✔✔Blanket Mortgage - ✔✔A mortgage which covers more than one piece of real estate.
Often used by a developer in the financing of undeveloped lots and condos. Contains a
partial release clause (gradual discharge as condo units sell)
✔✔Take-out Loan - ✔✔A long term financing option that replaces (or takes out) short
term or interim financing such as a construction loan
✔✔Participation Financing - ✔✔The lender, in addition to receiving interest on the
loan/mortgage, also participates (gets in on the action) in cash flow/profit
✔✔Adjusted Cost Base - ✔✔The original property cost plus any acquisition expenses,
additions, and improvements. Used to determine capital gain from a sale for taxation
purposes
✔✔Capital Cost Allowance (CCA) - ✔✔The maximum allowance for depreciation of a
capital asset under the Income Tax Act. This reflects the reality that capital assets can
lose value over time. CCA can be used by a taxpayer to offset income generated -
thereby reducing taxes
, ✔✔Half Year Rule - ✔✔Applies to the first year the asset is acquired. A taxpayer
shouldn't gain a tax advantage for late purchases of capital property in a tax year - only
50% of those purchases are considered in calculating the CCA for the first year
✔✔Having a contract FOR service with a brokerage... - ✔✔An independent contractor
✔✔An independent contractor is viewed as... - ✔✔an independent contractor for
taxation purposes but as an employee for REBBA purposes
✔✔Daylighting - ✔✔is used in relation to sightlines for unobstructed view in relation to
placement of buildings - especially corner lots
✔✔Range - ✔✔The max distance a consumer will travel to acquire a specific product or
service
✔✔Clustering - ✔✔Grouping together stores for ease of the consumer
✔✔Threshold (demographic) - ✔✔Refers to the population size necessary to support a
specific business
✔✔Threshold (economics) - ✔✔Refers to household income and expenditures
✔✔High R/U Factor - ✔✔Could mean there's lots of secondary space
✔✔Gross floor area - ✔✔Sum area of each floor above and below grade in a building or
structure measured from the outside walls or mid point of common walls
✔✔Gross Building Area - ✔✔the total gross floor area of a building based on external
measurements, excluding any unenclosed areas
✔✔Gross leasable area - ✔✔The total floor area designed for the occupancy and
exclusive use of tenants in a commercial enterprise
✔✔Rentable Area - ✔✔Most commonly found in office leases. The usable area of
tenanted space plus common areas
✔✔Usable area - ✔✔Actual space occupied by a tenant
✔✔Centre-core Buildings - ✔✔Facilities such as toilets, elevator banks, janitors' closets,
utilities, smoke shafts, mechanical facilities and stairwells are constructed in the centre
of the buildings. These are better suited for multiple tenancies.
✔✔Three methods of valuation - ✔✔Cost approach, income approach, and direct
comparison approach
QUESTIONS AND ANSWERS RATED A+
✔✔Bridge Loan - ✔✔A short-term loan for borrowers who need more time to find
permanent financing.
EX: a buyer is waiting on a sale for funds and the lender gives short-term financing until
transaction closes
✔✔Gap Loan - ✔✔EX: a developer is receiving 4 advances from a lender at specific
points during construction. A gap loan can be used to "fill the financing gap" between
each advance
✔✔Development Loan - ✔✔Lender advances the funds as a collateral loan (usually
interest only payments) until the loan can be paid out from sale proceeds
✔✔Collateral Loan - ✔✔Loan is guaranteed with owned assets
✔✔Standby Loan - ✔✔Short term loan (high interest rate) that provides a developer
with flexibility to get a project underway before finding more favourable long-term
financing
✔✔Wraparound Mortgage - ✔✔When there is a favourable mortgage that can be
assumed, a second mortgage can be obtained to supply extra financing while still
benefiting from the original mortgage
✔✔Blanket Mortgage - ✔✔A mortgage which covers more than one piece of real estate.
Often used by a developer in the financing of undeveloped lots and condos. Contains a
partial release clause (gradual discharge as condo units sell)
✔✔Take-out Loan - ✔✔A long term financing option that replaces (or takes out) short
term or interim financing such as a construction loan
✔✔Participation Financing - ✔✔The lender, in addition to receiving interest on the
loan/mortgage, also participates (gets in on the action) in cash flow/profit
✔✔Adjusted Cost Base - ✔✔The original property cost plus any acquisition expenses,
additions, and improvements. Used to determine capital gain from a sale for taxation
purposes
✔✔Capital Cost Allowance (CCA) - ✔✔The maximum allowance for depreciation of a
capital asset under the Income Tax Act. This reflects the reality that capital assets can
lose value over time. CCA can be used by a taxpayer to offset income generated -
thereby reducing taxes
, ✔✔Half Year Rule - ✔✔Applies to the first year the asset is acquired. A taxpayer
shouldn't gain a tax advantage for late purchases of capital property in a tax year - only
50% of those purchases are considered in calculating the CCA for the first year
✔✔Having a contract FOR service with a brokerage... - ✔✔An independent contractor
✔✔An independent contractor is viewed as... - ✔✔an independent contractor for
taxation purposes but as an employee for REBBA purposes
✔✔Daylighting - ✔✔is used in relation to sightlines for unobstructed view in relation to
placement of buildings - especially corner lots
✔✔Range - ✔✔The max distance a consumer will travel to acquire a specific product or
service
✔✔Clustering - ✔✔Grouping together stores for ease of the consumer
✔✔Threshold (demographic) - ✔✔Refers to the population size necessary to support a
specific business
✔✔Threshold (economics) - ✔✔Refers to household income and expenditures
✔✔High R/U Factor - ✔✔Could mean there's lots of secondary space
✔✔Gross floor area - ✔✔Sum area of each floor above and below grade in a building or
structure measured from the outside walls or mid point of common walls
✔✔Gross Building Area - ✔✔the total gross floor area of a building based on external
measurements, excluding any unenclosed areas
✔✔Gross leasable area - ✔✔The total floor area designed for the occupancy and
exclusive use of tenants in a commercial enterprise
✔✔Rentable Area - ✔✔Most commonly found in office leases. The usable area of
tenanted space plus common areas
✔✔Usable area - ✔✔Actual space occupied by a tenant
✔✔Centre-core Buildings - ✔✔Facilities such as toilets, elevator banks, janitors' closets,
utilities, smoke shafts, mechanical facilities and stairwells are constructed in the centre
of the buildings. These are better suited for multiple tenancies.
✔✔Three methods of valuation - ✔✔Cost approach, income approach, and direct
comparison approach
