HECM Practice EXAM 2026 (Actual Exam) Questions with verified Answers
(Latest Update 2026) UPDATE!! HECM Test
The HECM Saver was introduced as an option to lower the upfront cost of a HECM by reducing the
upfront mortgage insurance premium to:
a. 0.
b. 0.01% of the Maximum Claim Amount.
c. 1% of the Maximum Claim Amount.
d. 1.25% of the Maximum Claim Amount. - (ANSWER)b
If repairs are required but can be completed after closing, the lender will create a repair set-aside in the
amount of:
a. 15% of the maximum claim amount.
b. 100% of the actual cost of repairs.
c. 100% of the estimated cost of repairs.
d. 150% of the estimated cost of repairs. - (ANSWER)d
TALC rates generally are greatest when borrowers live:
a. less than their life expectancies.
b. to their full life expectances.
c. longer than their life expectancies - (ANSWER)a
The net principal limit at closing is:
a. a percentage of the maximum claim amount before any funds are set-aside or any fees are paid.
b. the credit remaining after all set-asides and fees have been deducted.
c. the lesser of the home's appraised value or the lending limit.
d. the most HUD will pay on an insurance claim. - (ANSWER)b
,HECM Practice EXAM 2026 (Actual Exam) Questions with verified Answers
(Latest Update 2026) UPDATE!! HECM Test
Mr. Martin is 83 and his wife is 65. If Mrs. Martin is removed from the title to the home, the HECM
principal limit would be:
a.smaller.
b. the same.
c. larger. - (ANSWER)c
T/F Most lenders require that borrowers take a lump sum payment if they choose an adjustable rate and
only allow a creditline with a fixed interest rate HECM. - (ANSWER)False
T/F Given the same principal limit, a term payment plan will provide a larger monthly payment than a
tenure payment plan. - (ANSWER)True
HECM term advances:
a. are generally larger than tenure advances.
b. are monthly payments for a fixed number of months chosen by the lender.
c. do not allow unscheduled lump sum draws. - (ANSWER)a
A borrower who needs a monthly payment for a short period of time and then wants to have the
opportunity to borrow more in the future may want to choose which type of payment plan?
a. Initial Lump Sum
b. Modified Tenure
c. Modified Term
d. Tenure - (ANSWER)c
A "forward" mortgage is a type of loan in which:
a. extra principal payments are made, so that the payoff date is moved forward.
, HECM Practice EXAM 2026 (Actual Exam) Questions with verified Answers
(Latest Update 2026) UPDATE!! HECM Test
b. payments are made on a regular schedule, gradually reducing the debt and building equity. -
(ANSWER)b
Which of the following is true of proprietary reverse mortgages?
a. Borrowers do not have to pay for FHA mortgage insurance.
b. Proprietary reverse mortgages are typically designed for high value homes (those beyond FHA
mortgage limits).
c. Proprietary reverse mortgages typically have lower loan-to-value ratio than HECMs.
d. All of the above - (ANSWER)d
When could a 75-year old, married to a 55-year old, be eligible for a reverse mortgage?
a. Only if the 55 year old does not live in the home and they have a legal separation agreement.
b. Only if the 55-year-old is not an owner of the home.
c. Only if the 55 year old signs an agreement that they will not inherit the property.
d. Only if the 55 year old has no more than a life-estate interest in the property. - (ANSWER)b
A reverse mortgage differs from a forward mortgage in that it is usually a loan with:
a. increasing debt and increasing equity.
b. increasing debt and decreasing equity.
c. decreasing debt and increasing equity. - (ANSWER)b
To be eligible for a HECM homeowners must live in their homes:
a. more than 3 months of each year.
b. more than 6 months of each year.
c. more than 7 months of each year.
d. 12 months of each calendar year. - (ANSWER)b
(Latest Update 2026) UPDATE!! HECM Test
The HECM Saver was introduced as an option to lower the upfront cost of a HECM by reducing the
upfront mortgage insurance premium to:
a. 0.
b. 0.01% of the Maximum Claim Amount.
c. 1% of the Maximum Claim Amount.
d. 1.25% of the Maximum Claim Amount. - (ANSWER)b
If repairs are required but can be completed after closing, the lender will create a repair set-aside in the
amount of:
a. 15% of the maximum claim amount.
b. 100% of the actual cost of repairs.
c. 100% of the estimated cost of repairs.
d. 150% of the estimated cost of repairs. - (ANSWER)d
TALC rates generally are greatest when borrowers live:
a. less than their life expectancies.
b. to their full life expectances.
c. longer than their life expectancies - (ANSWER)a
The net principal limit at closing is:
a. a percentage of the maximum claim amount before any funds are set-aside or any fees are paid.
b. the credit remaining after all set-asides and fees have been deducted.
c. the lesser of the home's appraised value or the lending limit.
d. the most HUD will pay on an insurance claim. - (ANSWER)b
,HECM Practice EXAM 2026 (Actual Exam) Questions with verified Answers
(Latest Update 2026) UPDATE!! HECM Test
Mr. Martin is 83 and his wife is 65. If Mrs. Martin is removed from the title to the home, the HECM
principal limit would be:
a.smaller.
b. the same.
c. larger. - (ANSWER)c
T/F Most lenders require that borrowers take a lump sum payment if they choose an adjustable rate and
only allow a creditline with a fixed interest rate HECM. - (ANSWER)False
T/F Given the same principal limit, a term payment plan will provide a larger monthly payment than a
tenure payment plan. - (ANSWER)True
HECM term advances:
a. are generally larger than tenure advances.
b. are monthly payments for a fixed number of months chosen by the lender.
c. do not allow unscheduled lump sum draws. - (ANSWER)a
A borrower who needs a monthly payment for a short period of time and then wants to have the
opportunity to borrow more in the future may want to choose which type of payment plan?
a. Initial Lump Sum
b. Modified Tenure
c. Modified Term
d. Tenure - (ANSWER)c
A "forward" mortgage is a type of loan in which:
a. extra principal payments are made, so that the payoff date is moved forward.
, HECM Practice EXAM 2026 (Actual Exam) Questions with verified Answers
(Latest Update 2026) UPDATE!! HECM Test
b. payments are made on a regular schedule, gradually reducing the debt and building equity. -
(ANSWER)b
Which of the following is true of proprietary reverse mortgages?
a. Borrowers do not have to pay for FHA mortgage insurance.
b. Proprietary reverse mortgages are typically designed for high value homes (those beyond FHA
mortgage limits).
c. Proprietary reverse mortgages typically have lower loan-to-value ratio than HECMs.
d. All of the above - (ANSWER)d
When could a 75-year old, married to a 55-year old, be eligible for a reverse mortgage?
a. Only if the 55 year old does not live in the home and they have a legal separation agreement.
b. Only if the 55-year-old is not an owner of the home.
c. Only if the 55 year old signs an agreement that they will not inherit the property.
d. Only if the 55 year old has no more than a life-estate interest in the property. - (ANSWER)b
A reverse mortgage differs from a forward mortgage in that it is usually a loan with:
a. increasing debt and increasing equity.
b. increasing debt and decreasing equity.
c. decreasing debt and increasing equity. - (ANSWER)b
To be eligible for a HECM homeowners must live in their homes:
a. more than 3 months of each year.
b. more than 6 months of each year.
c. more than 7 months of each year.
d. 12 months of each calendar year. - (ANSWER)b
