California Real Estate Practice Exam

A buyer purchasing a home financed by a new FHA loan should do all of the following, except:

1. Contact FHA for an appraisal

2. Find a lender who makes FHA loans

3. Find a property that will meet FHA requirements

4. Find a seller willing to sell under FHA terms

The correct answer is: Contact FHA for an appraisal

When a buyer is purchasing a home with an FHA loan, there are certain actions that are essential for ensuring that the financing process goes smoothly. One of these steps is not specifically requiring the buyer to contact the FHA for an appraisal. The appraisal process for FHA loans is typically handled through the lender, who will order the appraisal from an approved appraiser. The purpose of the appraisal is not just to determine the property's market value but also to ensure that the property meets FHA's minimum property standards. The lender functions as the intermediary between the buyer and the FHA, streamlining the appraisal process without requiring direct contact from the buyer. In contrast, seeking a lender who specializes in FHA loans is a critical step, as not all lenders offer these types of loans. Moreover, it is essential for the buyer to find a property that complies with FHA guidelines, as these loans have specific requirements regarding property condition and safety. Additionally, finding a seller who agrees to the terms that accompany an FHA loan can be crucial, as these terms may differ from traditional financing options, such as the minimum down payment and other conditions.