Tennessee Realtor State Practice Exam

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The FHA loan program is primarily designed for borrowers who have:

A high credit score
A minimal down payment and less-than-stellar credit
Significant savings
An extensive credit history

The correct answer is: A minimal down payment and less-than-stellar credit

The FHA loan program is specifically designed to assist borrowers who may not have a strong financial background, which includes those with less-than-stellar credit and a minimal down payment. This program aims to make homeownership more accessible to a wider range of individuals, particularly first-time homebuyers or those with limited resources. One of the key features of FHA loans is that they allow lower credit scores compared to conventional loans, making it easier for individuals who may struggle with creditworthiness to qualify for financing. Additionally, the program permits a down payment as low as 3.5% of the purchase price, which significantly reduces the initial financial barrier to buying a home. These attributes of the FHA loan program cater specifically to borrowers who may face challenges in gathering substantial savings or achieving high credit scores, thus promoting inclusivity in the housing market.