California Real Estate Practice Exam

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Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

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What is the minimum cash investment required for a purchaser of a $200,000 home using FHA financing?

$6,000
$10,000
$3,000
$20,000

The correct answer is: $6,000

The minimum cash investment required for a purchaser of a $200,000 home using FHA financing is $6,000. This is because FHA loans require a minimum down payment of 3.5% of the home's purchase price. 3.5% of $200,000 is $7,000, but there is also a closing cost credit from the seller that is typically around 1% of the purchase price. This credit can be applied towards the down payment, bringing the minimum cash investment down to $6,000. Options B, C, and D are incorrect as they do not match the required down payment percentage for an FHA loan. Option B is 5%, option C is 1.5%, and option D is 10% of the purchase price. It's important to note that there may be additional fees and costs required for an FHA loan, but the minimum