Alabama Real Estate Practice Exam

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Prepare for your Alabama Real Estate Exam with a comprehensive quiz comprised of flashcards and multiple choice questions, complete with hints and explanations.

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What does the FHA insure?

  1. That the lender will not lose money

  2. That the property is free from defects

  3. The buyer's personal assets

  4. The FHA-approved appraiser's fee

The correct answer is: That the lender will not lose money

The FHA insures the lender against losses in the event that the borrower defaults on their loan. This means that the FHA protects the lender's financial investment and ensures they do not lose money on the loan. Options B, C, and D are not correct because the FHA does not insure the property's condition or guarantee against the buyer's personal assets or the appraiser's fee.

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