HECM LATEST 2026 EXAM QUESTIONS AND SOLUTIONS
RATED A+
✔✔A reverse mortgage must be repaid
a) by the tenth of every month
b) when the borrower dies, sells, or permanently moves away
c) when the loan balance equals the value of the home
d) when the borrower uses up all available loan funds - ✔✔b
✔✔The purpose of a reverse mortgage is often
a) to buy a home
b) to sell a home
c) to generate cash - ✔✔c
✔✔Reverse mortgages are typically loans with
a) rising debt and falling equity
b) falling debt and rising equity
c) rising debt and rising equity - ✔✔a
✔✔When a reverse mortgage becomes due and payable
a) the lender gets the house
b) the federal government gets the house
c) the area agency on aging gets the house
d) none of the above - ✔✔d
✔✔The "non-recourse" limit on a reverse mortgage means
a) the lender cannot seek repayment from anything other than the home's value
b) the borrower's estate and heirs are protected against deficiency judgments
c) the borrower cannot owe more than the value of the home
d) all of the above - ✔✔d
✔✔The purpose of reverse mortgage insurance is
a) to protect lenders against loan losses
b) to protect borrowers with a non-recourse limit
c) to let borrowers remain in their homes as long as they choose
d) a, b, and c above - ✔✔d
✔✔The risk of loan losses in reverse mortgage lending is controlled by
a) controlling the amount of the loan advances
b) limiting loan advances to 28% of income
c) charging a premium on all loans to create a reserve fund
d) a and / or c above - ✔✔d
✔✔To qualify for a HECM loan
, a) The home must be completely paid off
b) the home must have been originally financed with an FHA "forward" mortgage
c) the borrower must live in the home as a principal residence
d) the borrower must be low-income - ✔✔c
✔✔To qualify for a HECM loan
a) at least one owner must be aged 65 or over
b) a mobile home or cooperative must be FHA-approved
c) a home must be debt free prior to loan application
d) none of the above - ✔✔d
✔✔When a HECM loan is repaid, the borrower must pay back
a) only the funds they received
b) the funds received plus simple interest
c) the funds received plus loan fees such as mortgage insurance and servicing fees
d) the funds received plus loan fees and interest compounded on the entire balance -
✔✔d
✔✔The payment options in the HECM program include
a) a fixed monthly advance for as long as a borrower lives in the home
b) a fixed monthly advance for a period chosen by the borrower
c) a creditline that lets the borrower select the timing and amount of the advances
d) a combination of monthly advances and creditline
e) all of the above - ✔✔e
✔✔The HECM loan may be used to pay for
a) repairs needed to meet FHA minimum property standards
b) standard closing costs
c) 2% mortgage insurance premium
d) the origination fee
e) all of the above - ✔✔e
✔✔When the adjustable interest rate on a reverse mortgage goes up
a) the monthly payments to the borrower go down
b) the rate at which the creditline grows goes up
c) the loan balance grows faster
d) b and c above - ✔✔d
✔✔T / F A HECM is a loan against the equity in a home. - ✔✔False
✔✔A 62 year old borrower would get _____ money from a HECM than a 82 year old
borrower.
a. more
b. less
RATED A+
✔✔A reverse mortgage must be repaid
a) by the tenth of every month
b) when the borrower dies, sells, or permanently moves away
c) when the loan balance equals the value of the home
d) when the borrower uses up all available loan funds - ✔✔b
✔✔The purpose of a reverse mortgage is often
a) to buy a home
b) to sell a home
c) to generate cash - ✔✔c
✔✔Reverse mortgages are typically loans with
a) rising debt and falling equity
b) falling debt and rising equity
c) rising debt and rising equity - ✔✔a
✔✔When a reverse mortgage becomes due and payable
a) the lender gets the house
b) the federal government gets the house
c) the area agency on aging gets the house
d) none of the above - ✔✔d
✔✔The "non-recourse" limit on a reverse mortgage means
a) the lender cannot seek repayment from anything other than the home's value
b) the borrower's estate and heirs are protected against deficiency judgments
c) the borrower cannot owe more than the value of the home
d) all of the above - ✔✔d
✔✔The purpose of reverse mortgage insurance is
a) to protect lenders against loan losses
b) to protect borrowers with a non-recourse limit
c) to let borrowers remain in their homes as long as they choose
d) a, b, and c above - ✔✔d
✔✔The risk of loan losses in reverse mortgage lending is controlled by
a) controlling the amount of the loan advances
b) limiting loan advances to 28% of income
c) charging a premium on all loans to create a reserve fund
d) a and / or c above - ✔✔d
✔✔To qualify for a HECM loan
, a) The home must be completely paid off
b) the home must have been originally financed with an FHA "forward" mortgage
c) the borrower must live in the home as a principal residence
d) the borrower must be low-income - ✔✔c
✔✔To qualify for a HECM loan
a) at least one owner must be aged 65 or over
b) a mobile home or cooperative must be FHA-approved
c) a home must be debt free prior to loan application
d) none of the above - ✔✔d
✔✔When a HECM loan is repaid, the borrower must pay back
a) only the funds they received
b) the funds received plus simple interest
c) the funds received plus loan fees such as mortgage insurance and servicing fees
d) the funds received plus loan fees and interest compounded on the entire balance -
✔✔d
✔✔The payment options in the HECM program include
a) a fixed monthly advance for as long as a borrower lives in the home
b) a fixed monthly advance for a period chosen by the borrower
c) a creditline that lets the borrower select the timing and amount of the advances
d) a combination of monthly advances and creditline
e) all of the above - ✔✔e
✔✔The HECM loan may be used to pay for
a) repairs needed to meet FHA minimum property standards
b) standard closing costs
c) 2% mortgage insurance premium
d) the origination fee
e) all of the above - ✔✔e
✔✔When the adjustable interest rate on a reverse mortgage goes up
a) the monthly payments to the borrower go down
b) the rate at which the creditline grows goes up
c) the loan balance grows faster
d) b and c above - ✔✔d
✔✔T / F A HECM is a loan against the equity in a home. - ✔✔False
✔✔A 62 year old borrower would get _____ money from a HECM than a 82 year old
borrower.
a. more
b. less
