Freddie Mac - Credit Smart Exam Questions
and Verified Answers
Question 1
The contractor asks for money up front and leaves after completing little or no repair
work.
Correct Answer
Home Improvement Loan Scam
Question 2
Government insured loans, such as FHA loans, are the only low down payment
mortgages available to homebuyers.
Correct Answer
False
Question 3
The percentage of your gross monthly income that goes toward paying for your
housing expenses is called the "housing expense ratio" and is based on the total
housing payment, which includes:
Correct Answer
Principal, interest, property taxes, homeowner's insurance, mortgage insurance,
homeowner's or condo association fees
Question 4
The seven protected classes under the Fair Housing Law are race, color, national
origin, religion, sex, family status and disability.
Correct Answer
True
Page 1 of 19
,Question 5
The principal amount is the total amount borrowed.
Correct Answer
True
Question 6
Lenders don't include your future housing payment in your debt-to-income ratio, only
all other outstanding debts.
Correct Answer
False
Question 7
If a lender denies your loan, they're required by law to provide the applicant with an
explanation and share the credit score they used to make the lending decision.
Correct Answer
True
Question 8
Derogatory information on your credit report may include: collections, judgements,
bankruptcies and/or late payments.
Correct Answer
True
Question 9
The following are alternatives to foreclosure (select all that apply):
Correct Answer
--Reinstatement
--Forbearance
--Loan modification
--Repayment plan
--Refinance
Page 2 of 19
, Question 10
True or False. The first step in the homebuying process is to apply for a loan so you
know how much you can afford?
Correct Answer
False
Question 11
The Multiple Listing Service (MLS) is an online tool that is publicly available and
widely used by homebuyers.
Correct Answer
False
Question 12
Contingencies are factors that must be satisfied in order for the deal to go forward.
Correct Answer
True
Question 13
The mortgage secures the loan with the home, essentially listing the home as
collateral.
Correct Answer
True
Question 14
What percentage of the purchase price is required as a down payment for
conventional conforming loans to avoid paying private mortgage insurance?
Correct Answer
20%
Page 3 of 19
and Verified Answers
Question 1
The contractor asks for money up front and leaves after completing little or no repair
work.
Correct Answer
Home Improvement Loan Scam
Question 2
Government insured loans, such as FHA loans, are the only low down payment
mortgages available to homebuyers.
Correct Answer
False
Question 3
The percentage of your gross monthly income that goes toward paying for your
housing expenses is called the "housing expense ratio" and is based on the total
housing payment, which includes:
Correct Answer
Principal, interest, property taxes, homeowner's insurance, mortgage insurance,
homeowner's or condo association fees
Question 4
The seven protected classes under the Fair Housing Law are race, color, national
origin, religion, sex, family status and disability.
Correct Answer
True
Page 1 of 19
,Question 5
The principal amount is the total amount borrowed.
Correct Answer
True
Question 6
Lenders don't include your future housing payment in your debt-to-income ratio, only
all other outstanding debts.
Correct Answer
False
Question 7
If a lender denies your loan, they're required by law to provide the applicant with an
explanation and share the credit score they used to make the lending decision.
Correct Answer
True
Question 8
Derogatory information on your credit report may include: collections, judgements,
bankruptcies and/or late payments.
Correct Answer
True
Question 9
The following are alternatives to foreclosure (select all that apply):
Correct Answer
--Reinstatement
--Forbearance
--Loan modification
--Repayment plan
--Refinance
Page 2 of 19
, Question 10
True or False. The first step in the homebuying process is to apply for a loan so you
know how much you can afford?
Correct Answer
False
Question 11
The Multiple Listing Service (MLS) is an online tool that is publicly available and
widely used by homebuyers.
Correct Answer
False
Question 12
Contingencies are factors that must be satisfied in order for the deal to go forward.
Correct Answer
True
Question 13
The mortgage secures the loan with the home, essentially listing the home as
collateral.
Correct Answer
True
Question 14
What percentage of the purchase price is required as a down payment for
conventional conforming loans to avoid paying private mortgage insurance?
Correct Answer
20%
Page 3 of 19
