Oregon Real Estate | Finance 3 Exam
Questions and Answers with Verified
Solutions | Latest Updated 2026
Conventional loan Non-government loan not backed by
government insurance or guarantee.
Government loan Loan tied to FHA, VA, or ODVA programs
with insurance or guarantee features.
FHA Federal Housing Administration program
that insures loans; borrowers pay MIP.
Fed VA Veterans Affairs program that guarantees
loans; often allows 0% down.
ODVA Oregon Department of Veterans Affairs
state-funded loan program.
Conforming loan Loan meeting Fannie Mae or Freddie
Mac underwriting standards.
Non-conforming loan Loan that does not meet conforming
standards.
Subprime loan High-risk non-conforming loan made to
less-qualified borrowers.
, NINJA loan No income, no job, no assets high-risk
loan product.
Loan-to-Value (LTV) Loan amount divided by the lower of
sales price or appraised value.
LTV formula Loan amount ÷ lower of sales price or
appraised value × 100.
Loan origination fee Fee charged by lender to originate a
loan.
Discount points Upfront fee paid to lower the interest
rate; 1 point equals 1% of the loan amount.
Points calculation Points amount = (% points) × loan amount.
Yield Spread Premium (YSP) Lender rebate generated when borrower
accepts above-market interest rate.
Break-even on points Months required for payment savings to
equal upfront points paid.
Mortgage insurance Insurance protecting lender from loss if
foreclosure proceeds are insufficient.
PMI Private mortgage insurance required on
conventional loans when down payment
is less than 20%.
Questions and Answers with Verified
Solutions | Latest Updated 2026
Conventional loan Non-government loan not backed by
government insurance or guarantee.
Government loan Loan tied to FHA, VA, or ODVA programs
with insurance or guarantee features.
FHA Federal Housing Administration program
that insures loans; borrowers pay MIP.
Fed VA Veterans Affairs program that guarantees
loans; often allows 0% down.
ODVA Oregon Department of Veterans Affairs
state-funded loan program.
Conforming loan Loan meeting Fannie Mae or Freddie
Mac underwriting standards.
Non-conforming loan Loan that does not meet conforming
standards.
Subprime loan High-risk non-conforming loan made to
less-qualified borrowers.
, NINJA loan No income, no job, no assets high-risk
loan product.
Loan-to-Value (LTV) Loan amount divided by the lower of
sales price or appraised value.
LTV formula Loan amount ÷ lower of sales price or
appraised value × 100.
Loan origination fee Fee charged by lender to originate a
loan.
Discount points Upfront fee paid to lower the interest
rate; 1 point equals 1% of the loan amount.
Points calculation Points amount = (% points) × loan amount.
Yield Spread Premium (YSP) Lender rebate generated when borrower
accepts above-market interest rate.
Break-even on points Months required for payment savings to
equal upfront points paid.
Mortgage insurance Insurance protecting lender from loss if
foreclosure proceeds are insufficient.
PMI Private mortgage insurance required on
conventional loans when down payment
is less than 20%.
