Study sets, textbooks, questions
Upgrade to remove ads
Real Estate Course 1 Chapters 20-24
Terms in this set (89)
Lenders give construction loans to finance the construction of improvements to property, such as homes, apartments and office buildings. The lender commits to the full amount of the loan, but disburses payments over the life of the construction project. The payments are made to the general contractor or the owner for the parts of the construction completed since the last payment. But before making a payment, the lender will inspect the completed work and ask the contractor to submit proof that the mechanic has waived the lien rights for the work the payment is covering.
Interest rates on construction loans are usually higher than on other loans because the risk is greater. Risks include:
Inadequate protection against mechanics' liens.
Potential delays in construction completion.
Financial failure of contractors or subcontractors.
The borrower pays interest on only the money that has been actually disbursed up to the payment date.
These loans are short-term. The borrower can get a permanent loan, usually called a takeout loan, which pays off or "takes out" the lender of the construction loan, when the construction is complete. Alternatively, a borrower may be able to convert the construction loan to a permanent fixed mortgage if the lender offers that option.
allows a borrower who has an existing loan to get another loan from a second lender without paying off the first loan
a short-term loan that covers the period between the end of one loan and the beginning of another.
Seller carry back mortgage?
is a tried and true method of facilitating the sale of a house
Hard Money Loan
a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate
In a seller carry back mortgage who decides the interest rate?
both the buyer and the seller
What does the LTV ratio stand for?
Private money loans are made by whom?
Rural Housing Service Loan (RHS)
an agency of the united states department of agriculture (USDA)
administers direct loans, loan guarantees and grants
In reference to the 203 (k) loan, these loans are not available to whom?
name 3 items lenders will look for when considering the application for a second mortgage
Significant equity in the first mortgage
low debt-to-income ratio
high credit score
solid employment history
What does a second lien holder have to satisfy before collecting on the second mortgage balance?
The first mortgage balance
A loan-to-value ratio typically hovers between
60% and 70% of the market value of the property
RHS programs are available to eligible applicants in
A wraparound mortgage is a form of
what type of insurance is required when a borrower obtains a FHA 203k loan
private mortgage insurance
Underwriting of construction loans usually focuses on
how the loan is repaid
When determining LTV, the word "value" is defined as
today's purchase price
Highly regulated by state andfederal agencies
Is any financial institution whos loans and lending practices are regulated by law
savings and loan associations
Life insurance companies
have if any, regulations
is a financial institution taht is designed to act as a depository for funds and as a lender for commercial activites usually short term loans
Savings and Loans Associations
financial institutions whose primary function is to promote thrift and home ownership
What is usury law?
regulate the max amount of interest an entity can change on various loans
How many types of Real estate investment trusts are there and what are they?
hybrid (or combined trusts)
What is the role of the secondary mortgage market?
The secondary mortgage market consists of holding warehouse agencies that purchase a number of mortgage loans and assemble them into one or more packages of loans for resale to investors.
Who are the 3 major players in the secondary mortgage market?
A government agency that plays an important role in the secondary mortgage market it guarantees mortgage backed securities using FHA insured and VA guaranteed loans as collateral.
The government-sponsored enterprise responsible for guaranteeing and funding home mortgages
created to deal primarily with the purchase of FHA VA loans
Deals with conventional loans
Why was farmer mac created?
To establish a secondary market for agricultural real estate and rural housing mortgage loans and to increase the availability of long-term credit at steady interest rates to American Farmers, ranchers and rural homeowners.
How have life insurance companies recently become more involved with single-family mortgages?
They have acquired bocks of single-family mortgages from the secondary market to enhance their investment portfolios
A syndicate is?
A group of two or more people who unite their resources to make an investment
A savings and loan association is a financial instiution whose main function is
to promote thrift and home ownership
How do most mortgage companies make money?
From loan origination and servicing fees
Mutual savings banks
are owned by their investors
Credit Unions are able to pay higher interest rates on deposits compared to other savings institutions, becasue
they do not pay income tax
Which financial institution primarily makes short term loans to businesses to finance their operations?
the energy efficiency of the building
What is a collection of laws, regulations, ordinances or other statutory requirments adopted by a government legislative authority that is involved in assuring the adequacy of the physical structures and healthy conditons of buildings?
a building code
The slope of the roof is also known as
the detailed set of plans will be used as a guide to construct the building are
the blue prints
what is one of the first considerations when preparing a building site?
Impact fees are imposed by
A violation of the MN building code is
The rpimary purpose of a building code is to
regulate new or proposed construction
How do concrete patios, decks and landings need to be installed so that water will not drain into doorway?
sloping away from the building
Approximately what percent of a final house price is due to a higher price for a finished lot resulting from regulations imposed during the lot's development?
The primary objectives of a master plan are to control and accommodate
social and economic growth
A master plan for land development sets specific guidelines on
how much growth the jurisdiction will allow
Country and municipal planning departments are not responsible for
analyzing growth patterns for public tranportation
In most areas, a planning board is made up of officials appointed by
the governments legislative body
A community achieves its land usage goals through a three phase process:
Development of a masterplan for the jurisdiction
Administration of the plan by municipal, country or regional planning board or commission
Implementation of the plan through public control of zoning, building codes, permits and other measures
What type of zoning regulates intensity of usage, by limiting the area of store or office per site area?
A growth plan does not consider
certificates of occupancy
Residential zoning restricts land use to
private, non-commercial dwellings
What is the term for a property with a use that clearly differs from current zoning?
what is the best definition of a master plan?
A fusion of land use laws and local land use objectives and strategies
What type of variance gives permission to use the land for a purpose not allowed by the current zoning?
A use variance
A CIC association typically allows owners
Limited rights and freedoms as compared to single dwelling home owner
The oldest forms of the planned unit development in america appeared shortly after
What important condominium documents are included in the deed?
Covenants, conditions, and restrictions
Manufactured homes are build as dwelling units of at least
320 sq ft
Which type of home ownership is absent of many of the day today responsibilities such as yard work
ownership in a common interest community
Which US city was the first to coin the actual term "planned out development"
lack axles and an automotive-type and wheels
A CIC association typically
has the power to adopt, amend and revoke rules not inconsistent with the associations governing documents
In a CIC, which entity is the declarant ?
Typically the developer of builder
Before sponsors of a cooperative of condominium may convert a rental apartment building, they must present an offering plan to each tenant and to the
What information is not included in proprietary lease?
Transfer of deed
For the most part, the approval for a PUD development falls to the
Legislative branch of local government
co-op shareholders hold interest as a
Requires the seller of a CIC unit to provide certain info including governing documents prior to a sale
Fannie Mae and Freddie Mac
encourage real estate mortgage loans that combine modular homes with land purchase
Most planned unit developments employ a
hierarchy of street types based on usage
What are the 3 essential characteristics of a condominium?
Real property, common elements, and a board of directors
Which entity owns the real estate in a co-op?
A condominium title report
shoes where in the official county records CCR documents are recorded
Who or what provides specific provisions for the operation of a particular CIC association?
The associations governing documents
To finance a property in a PUD, an individual will go through what type of qualification
the same qualification process as in residential financing mortgages
When can the sponsor retain board control until all units are sold?
In a new development
What best defines a manufactured home?
Homes build entirely in the factory under a federal building code administered by the US department of development HUD
In which type of development would you most likely find a circulation system that links residential groupings, open space areas, schools, and local shopping ares?
What are the 3 documents that are considered the legal blueprint of a condominium?
Declaration, articles of incorporation, and rules and regulations
What type of housing is found in PUDs
What are the basic rules that a condominium works under and operates?
Which of the following units would be classified as a mobile home?
a manufactured home produced prior to june 15, 1976
Which entity governs a CIC?
Board of directors
Why is the initial plan for converting an apartment building to a cooperative or condominium called a 'red herring;
The legend on its cover must be printed in bold red lettering
A village center development with apartments above shops would be classified as what type of PUD?
Other sets by this creator
Real Estate Course 1 Chapters 15-18
Real Estate Course 1 Chapters 15-19
Real Estate Course 1 Chapters 10-14
Real Estate Course 1 Chapter 5-9
Other Quizlet sets
Pearson Exemplar 25.D - Failure to Thrive
Klinische Wissenschaften VL 3