California Real Estate Practice Exam

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Master the California Real Estate Exam with our comprehensive practice quiz. Get expert tips, detailed content review, and insider strategies to pass on your first try.

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A conforming loan is one that?

Has a fixed interest rate
Meets Federal National Mortgage Association (FNMA) standards
Is offered by any local bank
Has no prepayment penalty

The correct answer is: Meets Federal National Mortgage Association (FNMA) standards

A conforming loan is a mortgage loan that meets the standards and guidelines set by Federal National Mortgage Association (FNMA), also known as Fannie Mae. This type of loan is considered lower risk by lenders because it follows guidelines for loan size, credit score, and debt-to-income ratio. Options A, C, and D are incorrect because they do not fully define what a conforming loan is. Option A, having a fixed interest rate, is common for both conforming and non-conforming loans. Option C, being offered by any local bank, does not take into account the specific guidelines set by FNMA. Option D, having no prepayment penalty, is not a defining factor of a conforming loan.