Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following accurately describes mortgage financing for a unit in an equity housing co-operative?

1. A unit in an equity housing co-operative is easily financed.

2. Buyers obtain a mortgage similarly to how they would for a condominium unit.

3. A mortgage on an equity co-operative is typically a blanket mortgage.

4. Units must be purchased with cash, as mortgage financing is unavailable.

5. Mortgage insurance is mandatory for all equity co-operative units.

6. Financing requires adherence to stricter credit guidelines.

The correct answer is: A mortgage on an equity co-operative is typically a blanket mortgage.

In an equity housing co-operative, the correct answer is that a mortgage on an equity co-operative is typically a blanket mortgage. This means that the cooperative corporation will have a single mortgage on the entire property, including all units and common areas. The cooperative members do not have individual mortgages on their units but instead, they collectively share the responsibility for the mortgage through their monthly fees. Option A is incorrect because financing for a unit in an equity housing co-operative is not necessarily easy. Option B is incorrect as buyers do not obtain a mortgage for a co-operative unit in the same way as they would for a condominium unit. Option D is incorrect as it states that units must be purchased with cash, which is not the case for equity housing co-operatives. Option E is incorrect as mortgage insurance is not mandatory for all equity co-operative units. Option F is incorrect as there are no specific guidelines mentioned in the question related to stricter credit guidelines for financing in an equity co-operative.