REAL ESTATE FINANCE ACTUAL EXAM PAPER
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ bought and sold. Answer: The secondary market is a national
market in which mortgages secured by real estate in all parts of the
United States are ______ ____ _______.
◉ buying loans, issuing mortgage backed securities. Answer:
Secondary market agencies have two main activities: 1) ___ _____ and
2) ______ ________ ________ _______.
◉ FNMA (Fannie Mae) Federal National Mortgage Association.
Answer: __________ exchanges mortgage back securities for a block or
pool of mortgages.
◉ FNMA. Answer: _____ is the nation's largest investor in residential
mortgages.
◉ FNMA. Answer: One of the primary responsibilities of _____ is to
maintain an active secondary money market for mortgages.
,◉ seasoned mortgage. Answer: One function of FNMA is selling
seasoned mortgages and trust deeds to individual investors and
financial institutions. A ______ ______ is one that has been in existence
for some time and that shows a good record of repayment by the
mortgagor (borrower)
◉ REIT. Answer: To be a _____, a company must distribute at least 90
percent of its taxable income to shareholders annually in the forms
of dividends.
◉ have at least 75% or its total assets invested in real estate; derive
at least 75% of its gross income from rents or mortgage interest;
have no more than 20% of it's assets invested in taxable RIETs
subsidiaries. Answer: A REIT must: be structured as a corporation,
trust, or association; be managed by a board of directors or trustees;
have transferable shares or transferable certificates of interest;
otherwise be taxable as a domestic corporation; not be a financial
institution or an insurance company; be jointly owned by 100
persons or more; have 95 percent of its income derived from
dividends, interest, and property income; pay dividends of at least
90% of the REIT's taxable income; have no more than 50% of the
held by five or fewer individuals during the last half of each taxable
year (5/50 rule); _______ ______ ____ ___ _ _ _ __ _ _ _ ; ______ __ ____ ___ __ __
__ __ _ __ _ _ _;_____ _ _ _ _ __ _ _ _ __ _ _
,◉ Conforming loans. Answer: ______ _____ are those loans that meet
the loan purchase requirements of both Fannie Mae and Freddie
Mac.
◉ supply reserve funds when needed and control bank and
consumer credit.. Answer: The two major purposes of the Federal
Reserve System, called the FED for short, are; ______ ____ ___ ___ __ and
____ ___ __ ___ ____
◉ Federal Reserve. Answer: The _______ _______ drives the mortgage
loan interest rate.
◉ Federal Reserve. Answer: The ______ ______has two primary
methods of controlling the flow of money in the United States. They
control the flow of money by their availability to change the reserve
requirements of the banks and/or changing the discount rate
charged to banks.
◉ Discount rate. Answer: ________ ____ is the rate the Federal Reserve
charges its member bank to borrow money
◉ National banks. Answer: _______ _____ must belong and any state
banks that wish may join the Federal Reserve System.
, ◉ Federal Deposit Insurance Corporation (FDIC). Answer: _______
_____ _____ _____(___) is a federal agency that insures deposits in
commercial banks up to $250,000 and , along with the Federal
Reserve System, regulates banks and banking procedures.
◉ Loan Portfolio. Answer: _____ _____ is the total of all the loans that a
financial institution or other lender holds at a given time. A list,
distribution, or grouping of mortgage loans.
◉ Short sale. Answer: ____ ____ is the sale of a property where the
lender agrees to settle for less than the amount owed on the
property
◉ Homestead. Answer: _______: In the Texas Constitution, a principle
residence of a family or adult single person is protected from forced
sale for all debt except: property taxes; federal tax liens of both
spouses; a home equity lien.....etc...
◉ Community property and joint tenancy. Answer: ____ ____ and ______
_______ are not the same thing.
◉ Usuary laws. Answer: _____ ____ put a cap on interest rate.
◉ Usury. Answer: ______ is the state law that prohibits the charging of
an interest rate in excess of the legal limit.
2026 QUESTIONS WITH SOLUTIONS GRADED
A+
◉ bought and sold. Answer: The secondary market is a national
market in which mortgages secured by real estate in all parts of the
United States are ______ ____ _______.
◉ buying loans, issuing mortgage backed securities. Answer:
Secondary market agencies have two main activities: 1) ___ _____ and
2) ______ ________ ________ _______.
◉ FNMA (Fannie Mae) Federal National Mortgage Association.
Answer: __________ exchanges mortgage back securities for a block or
pool of mortgages.
◉ FNMA. Answer: _____ is the nation's largest investor in residential
mortgages.
◉ FNMA. Answer: One of the primary responsibilities of _____ is to
maintain an active secondary money market for mortgages.
,◉ seasoned mortgage. Answer: One function of FNMA is selling
seasoned mortgages and trust deeds to individual investors and
financial institutions. A ______ ______ is one that has been in existence
for some time and that shows a good record of repayment by the
mortgagor (borrower)
◉ REIT. Answer: To be a _____, a company must distribute at least 90
percent of its taxable income to shareholders annually in the forms
of dividends.
◉ have at least 75% or its total assets invested in real estate; derive
at least 75% of its gross income from rents or mortgage interest;
have no more than 20% of it's assets invested in taxable RIETs
subsidiaries. Answer: A REIT must: be structured as a corporation,
trust, or association; be managed by a board of directors or trustees;
have transferable shares or transferable certificates of interest;
otherwise be taxable as a domestic corporation; not be a financial
institution or an insurance company; be jointly owned by 100
persons or more; have 95 percent of its income derived from
dividends, interest, and property income; pay dividends of at least
90% of the REIT's taxable income; have no more than 50% of the
held by five or fewer individuals during the last half of each taxable
year (5/50 rule); _______ ______ ____ ___ _ _ _ __ _ _ _ ; ______ __ ____ ___ __ __
__ __ _ __ _ _ _;_____ _ _ _ _ __ _ _ _ __ _ _
,◉ Conforming loans. Answer: ______ _____ are those loans that meet
the loan purchase requirements of both Fannie Mae and Freddie
Mac.
◉ supply reserve funds when needed and control bank and
consumer credit.. Answer: The two major purposes of the Federal
Reserve System, called the FED for short, are; ______ ____ ___ ___ __ and
____ ___ __ ___ ____
◉ Federal Reserve. Answer: The _______ _______ drives the mortgage
loan interest rate.
◉ Federal Reserve. Answer: The ______ ______has two primary
methods of controlling the flow of money in the United States. They
control the flow of money by their availability to change the reserve
requirements of the banks and/or changing the discount rate
charged to banks.
◉ Discount rate. Answer: ________ ____ is the rate the Federal Reserve
charges its member bank to borrow money
◉ National banks. Answer: _______ _____ must belong and any state
banks that wish may join the Federal Reserve System.
, ◉ Federal Deposit Insurance Corporation (FDIC). Answer: _______
_____ _____ _____(___) is a federal agency that insures deposits in
commercial banks up to $250,000 and , along with the Federal
Reserve System, regulates banks and banking procedures.
◉ Loan Portfolio. Answer: _____ _____ is the total of all the loans that a
financial institution or other lender holds at a given time. A list,
distribution, or grouping of mortgage loans.
◉ Short sale. Answer: ____ ____ is the sale of a property where the
lender agrees to settle for less than the amount owed on the
property
◉ Homestead. Answer: _______: In the Texas Constitution, a principle
residence of a family or adult single person is protected from forced
sale for all debt except: property taxes; federal tax liens of both
spouses; a home equity lien.....etc...
◉ Community property and joint tenancy. Answer: ____ ____ and ______
_______ are not the same thing.
◉ Usuary laws. Answer: _____ ____ put a cap on interest rate.
◉ Usury. Answer: ______ is the state law that prohibits the charging of
an interest rate in excess of the legal limit.
