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 true about the FHA?

It lends money directly
It does not lend money
It underwrites all mortgage loans
It only insures loans over $500,000

The correct answer is: It does not lend money

FHA, or Federal Housing Administration, does not actually lend money directly to borrowers. Instead, it provides insurance to lenders, which makes it easier for borrowers to obtain home loans since the lenders are protected against defaults. Option A is incorrect because FHA does not directly lend money. Option C is incorrect because it only underwrites certain types of mortgage loans, not all of them. Option D is incorrect because FHA insures loans of varying amounts, not just those over $500,000.