California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

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What is the minimum cash investment required for a purchaser of a $200,000 home using FHA financing?

$6,000
$10,000
$3,000
$20,000

The correct answer is: $6,000

The minimum cash investment required for a purchaser of a $200,000 home using FHA financing is $6,000. This is because FHA loans require a minimum down payment of 3.5% of the home's purchase price. 3.5% of $200,000 is $7,000, but there is also a closing cost credit from the seller that is typically around 1% of the purchase price. This credit can be applied towards the down payment, bringing the minimum cash investment down to $6,000. Options B, C, and D are incorrect as they do not match the required down payment percentage for an FHA loan. Option B is 5%, option C is 1.5%, and option D is 10% of the purchase price. It's important to note that there may be additional fees and costs required for an FHA loan, but the minimum