VA REAL ESTATE LICENSING EXAM -
NATIONAL PORTION QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS LATEST UPDATED
2025/2026
Fannie Mae (FNMA)
Answer: A government-sponsored private corporation that helps provide funds for
primary lenders by buying and selling FHA, VA, and conventional loans.
Minnie Mae (GNMA)
Answer: A federal agency under HUD that manages federal housing loan
programs with subsidies.
Freddie Mac (FHLMC)
Answer: A government-created entity that borrows money from pension funds and
trusts to purchase mortgages, pool them, and sell bonds backed by these mortgages
on the open market.
Primary Mortgage Market
Answer:
1. The initial market where lenders (or originators) directly provide mortgage
loans to borrowers.
2. Key activities include loan origination and servicing. A conventional loan is
one that is originated in the primary market without government insurance
(FHA) or guarantees (VA). These loans typically carry higher risk for
lenders than government-backed loans.
o Down Payment: Typically 20%.
o Private Mortgage Insurance (PMI): Required on loans with a Loan-
to-Value (LTV) ratio over 80%.
,Secondary Mortgage Market -ANSWER✔✔1. Network of institutions that
purchase and sell existing mortgages
2. Two forces led to it's creation:
--Business entities with cash reserves in real estate
--Primary Market financial Institutions in need of cash to originate loans
3. Fannie Mae, Ginnie Mae, Freddie Mac
Federal Housing Administration (FHA) -ANSWER✔✔1. Insures but does NOT
originate loans
2. Debt to Income Ratio: 31% for housing costs, 43% for housing expenses and
other long-term debt
3. FHA borrowers MUST purchase FHA mortgage insurance
4. Criteria more forgiving for credit score than on conventional loan
VA Guaranteed Home Loan (VA Loan) -ANSWER✔✔1. Loan guaranteed by the
department of veteran affairs for eligible veterans that purchase, build or refinance
a house
2. Guaranteed by RARELY originates
3. The LENDER (NOT the VA) determines max loan amount and interest rates
Mortgage -ANSWER✔✔1. Between 2 Parties
2. Borrower retains title while lender takes a lien on the property
*A specific loan secured by a voluntary lien on real property, where a property
owner enters into a contract to borrow money and voluntarily agrees to extinguish
his rights to his real property in favor of the lender if he fails to pay the debt
according to the terms of the loan agreement.*
, Deed of Trust -ANSWER✔✔1. Between 3 Parties
2. Neutral 3rd party (trustee) holds title until loan is repaid in full
Which of the following is most often included in a mortgage?
1. Seisin
2. Further Assurances
3. Quiet Enjoyment
4. Pay Taxes -ANSWER✔✔4. Pay taxes
APR Calculation -ANSWER✔✔Interest Rate + ALL fees
Truth in Lending Act (TILA) -ANSWER✔✔Federal law with the primary purpose
to promote the meaningful disclosure of consumer credit and lease terms in order
to facilitate choice
Regulation Z -ANSWER✔✔Requires lenders to disclose key loan terms and fees
when advertising and selling services
RESPA -ANSWER✔✔Federal law administered and enforced by the Consumer
Financial Protection Bureau (CFPB), which regulates closing procedures to ensure
that lenders fully inform buyers and sellers of all settlement costs that lenders do
not engage in unfair practices
***Does NOT apply to CASH transactions***
RESPA prevents anyone from giving or accepting a fee, kickback or anything of
value in exchange for referrals of settlement service business involving a federally
related mortgage loan
NATIONAL PORTION QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS LATEST UPDATED
2025/2026
Fannie Mae (FNMA)
Answer: A government-sponsored private corporation that helps provide funds for
primary lenders by buying and selling FHA, VA, and conventional loans.
Minnie Mae (GNMA)
Answer: A federal agency under HUD that manages federal housing loan
programs with subsidies.
Freddie Mac (FHLMC)
Answer: A government-created entity that borrows money from pension funds and
trusts to purchase mortgages, pool them, and sell bonds backed by these mortgages
on the open market.
Primary Mortgage Market
Answer:
1. The initial market where lenders (or originators) directly provide mortgage
loans to borrowers.
2. Key activities include loan origination and servicing. A conventional loan is
one that is originated in the primary market without government insurance
(FHA) or guarantees (VA). These loans typically carry higher risk for
lenders than government-backed loans.
o Down Payment: Typically 20%.
o Private Mortgage Insurance (PMI): Required on loans with a Loan-
to-Value (LTV) ratio over 80%.
,Secondary Mortgage Market -ANSWER✔✔1. Network of institutions that
purchase and sell existing mortgages
2. Two forces led to it's creation:
--Business entities with cash reserves in real estate
--Primary Market financial Institutions in need of cash to originate loans
3. Fannie Mae, Ginnie Mae, Freddie Mac
Federal Housing Administration (FHA) -ANSWER✔✔1. Insures but does NOT
originate loans
2. Debt to Income Ratio: 31% for housing costs, 43% for housing expenses and
other long-term debt
3. FHA borrowers MUST purchase FHA mortgage insurance
4. Criteria more forgiving for credit score than on conventional loan
VA Guaranteed Home Loan (VA Loan) -ANSWER✔✔1. Loan guaranteed by the
department of veteran affairs for eligible veterans that purchase, build or refinance
a house
2. Guaranteed by RARELY originates
3. The LENDER (NOT the VA) determines max loan amount and interest rates
Mortgage -ANSWER✔✔1. Between 2 Parties
2. Borrower retains title while lender takes a lien on the property
*A specific loan secured by a voluntary lien on real property, where a property
owner enters into a contract to borrow money and voluntarily agrees to extinguish
his rights to his real property in favor of the lender if he fails to pay the debt
according to the terms of the loan agreement.*
, Deed of Trust -ANSWER✔✔1. Between 3 Parties
2. Neutral 3rd party (trustee) holds title until loan is repaid in full
Which of the following is most often included in a mortgage?
1. Seisin
2. Further Assurances
3. Quiet Enjoyment
4. Pay Taxes -ANSWER✔✔4. Pay taxes
APR Calculation -ANSWER✔✔Interest Rate + ALL fees
Truth in Lending Act (TILA) -ANSWER✔✔Federal law with the primary purpose
to promote the meaningful disclosure of consumer credit and lease terms in order
to facilitate choice
Regulation Z -ANSWER✔✔Requires lenders to disclose key loan terms and fees
when advertising and selling services
RESPA -ANSWER✔✔Federal law administered and enforced by the Consumer
Financial Protection Bureau (CFPB), which regulates closing procedures to ensure
that lenders fully inform buyers and sellers of all settlement costs that lenders do
not engage in unfair practices
***Does NOT apply to CASH transactions***
RESPA prevents anyone from giving or accepting a fee, kickback or anything of
value in exchange for referrals of settlement service business involving a federally
related mortgage loan
