Question

Which of the following features is permissible on a Section 32 loan?

A) Balloon payments
B) Negative amortization
C) Interest-only payments
D) Adjustable interest rates

Answer 1

The permissible features on a Section 32 loan are interest-only payments and adjustable interest rates.

Step-by-step explanation:

The permissible features on a Section 32 loan are:

1. Interest-only payments: This means that the borrower only needs to make monthly interest payments and does not have to pay back the principal during a specific period of time.
2. Adjustable interest rates: These loans have interest rates that can change over time, often based on fluctuating market rates.

Therefore, the correct answer is C) Interest-only payments and D) Adjustable interest rates.