Florida Real Estate Practice Exam

What determines the total dollar amount that can be borrowed with an FHA-insured loan?

1. It depends on where the property is located

2. There is no limit

3. Up to 80% of the sales price

4. Up to the purchase price of the property

The correct answer is: It depends on where the property is located

An FHA-insured loan is a type of mortgage loan insured by the Federal Housing Administration. The total dollar amount that can be borrowed with this type of loan is determined by the property's location. This is because the loan limits for FHA-insured loans vary by county, and are based on the median home prices in that area. Therefore, the total amount that can be borrowed will be different depending on where the property is located. Options B, C, and D are incorrect because they do not accurately reflect the role that location plays in determining the total loan amount. Option B is incorrect because there are loan limits for FHA-insured loans, so there is in fact a cap on the total amount that can be borrowed. Option C is incorrect because the 80% refers to the loan-to-value ratio, not the total loan amount. And option D is incorrect because the purchase price of the property may