Champions School of Real Estate –
Investment CE Exam Q&A, Fully Explained
Comprehensive Study Guide for Real Estate Professionals
July 2025
280 Questions with Detailed Explanations
,Contents
1 Introduction 2
2 Investment CE Exam Questions and Answers 2
2.1 Mortgage and Financing Fundamentals . . . . . . . . . . . . . . . . . . . 2
2.2 Investment and Property Principles . . . . . . . . . . . . . . . . . . . . . 8
2.3 Legal and Regulatory Framework . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Additional Investment Concepts . . . . . . . . . . . . . . . . . . . . . . . 11
1
, Champions School of Real Estate – Investment CE Exam
1 Introduction
This study guide is tailored for real estate professionals preparing for the Champions
School of Real Estate Investment Continuing Education (CE) Exam. It includes 280
revised questions with detailed, jargon-free explanations, focusing on critical topics such
as mortgage financing, investment strategies, property valuation, and regulatory frame-
works. Drawing from reliable sources like Quizlet and Champions School materials, the
content is designed to enhance understanding and ensure exam readiness. Each answer
is thoroughly explained to provide clarity and context for practical application.
2 Investment CE Exam Questions and Answers
2.1 Mortgage and Financing Fundamentals
1. What is the process of starting a mortgage loan application called?
Answer: Origination.
Explanation: Origination is the initial phase of securing a mortgage, where a bor-
rower submits an application, and the lender processes it. This involves gathering
financial information, verifying credit, and assessing the property. It’s the founda-
tion of the lending process, ensuring all necessary documentation is prepared for
underwriting.
2. What evaluates a borrower’s ability to repay a loan and the property’s suitability?
Answer: Underwriting.
Explanation: Underwriting is a risk assessment process where lenders analyze a
borrower’s financial profile, including income, credit history, and debt-to-income
ratio, alongside the property’s value. This step determines whether the loan is a
safe investment for the lender, balancing borrower reliability with collateral value.
3. What is the final step in a real estate transaction where funds and ownership
transfer?
Answer: Closing.
Explanation: Closing, or settlement, is when all parties sign final documents, funds
are disbursed, and property ownership transfers. It involves reviewing the Closing
Disclosure, ensuring all terms are met, and recording the deed. This step concludes
the transaction, making it legally binding.
4. What ensures funds are available for a real estate closing?
Answer: Funding.
Explanation: Funding involves transferring the loan amount to an escrow or title
company for disbursement at closing. The lender verifies all conditions are met
before releasing funds, ensuring the buyer, seller, and other parties receive their
respective payments to complete the transaction.
5. Which 2008 legislation supported the U.S. housing market’s recovery?
Answer: Housing and Economic Recovery Act (HERA).
Explanation: HERA was enacted to address the 2008 housing crisis by strengthen-
ing Fannie Mae and Freddie Mac, reforming the Federal Housing Administration,
and providing tax credits for homebuyers. It aimed to stabilize the market by
2
Investment CE Exam Q&A, Fully Explained
Comprehensive Study Guide for Real Estate Professionals
July 2025
280 Questions with Detailed Explanations
,Contents
1 Introduction 2
2 Investment CE Exam Questions and Answers 2
2.1 Mortgage and Financing Fundamentals . . . . . . . . . . . . . . . . . . . 2
2.2 Investment and Property Principles . . . . . . . . . . . . . . . . . . . . . 8
2.3 Legal and Regulatory Framework . . . . . . . . . . . . . . . . . . . . . . 10
2.4 Additional Investment Concepts . . . . . . . . . . . . . . . . . . . . . . . 11
1
, Champions School of Real Estate – Investment CE Exam
1 Introduction
This study guide is tailored for real estate professionals preparing for the Champions
School of Real Estate Investment Continuing Education (CE) Exam. It includes 280
revised questions with detailed, jargon-free explanations, focusing on critical topics such
as mortgage financing, investment strategies, property valuation, and regulatory frame-
works. Drawing from reliable sources like Quizlet and Champions School materials, the
content is designed to enhance understanding and ensure exam readiness. Each answer
is thoroughly explained to provide clarity and context for practical application.
2 Investment CE Exam Questions and Answers
2.1 Mortgage and Financing Fundamentals
1. What is the process of starting a mortgage loan application called?
Answer: Origination.
Explanation: Origination is the initial phase of securing a mortgage, where a bor-
rower submits an application, and the lender processes it. This involves gathering
financial information, verifying credit, and assessing the property. It’s the founda-
tion of the lending process, ensuring all necessary documentation is prepared for
underwriting.
2. What evaluates a borrower’s ability to repay a loan and the property’s suitability?
Answer: Underwriting.
Explanation: Underwriting is a risk assessment process where lenders analyze a
borrower’s financial profile, including income, credit history, and debt-to-income
ratio, alongside the property’s value. This step determines whether the loan is a
safe investment for the lender, balancing borrower reliability with collateral value.
3. What is the final step in a real estate transaction where funds and ownership
transfer?
Answer: Closing.
Explanation: Closing, or settlement, is when all parties sign final documents, funds
are disbursed, and property ownership transfers. It involves reviewing the Closing
Disclosure, ensuring all terms are met, and recording the deed. This step concludes
the transaction, making it legally binding.
4. What ensures funds are available for a real estate closing?
Answer: Funding.
Explanation: Funding involves transferring the loan amount to an escrow or title
company for disbursement at closing. The lender verifies all conditions are met
before releasing funds, ensuring the buyer, seller, and other parties receive their
respective payments to complete the transaction.
5. Which 2008 legislation supported the U.S. housing market’s recovery?
Answer: Housing and Economic Recovery Act (HERA).
Explanation: HERA was enacted to address the 2008 housing crisis by strengthen-
ing Fannie Mae and Freddie Mac, reforming the Federal Housing Administration,
and providing tax credits for homebuyers. It aimed to stabilize the market by
2
