Question

How much hazard insurance does FNMA require on a property?

A) 50% of the property's appraised value
B) Sufficient coverage to cover the outstanding mortgage balance
C) At least 80% of the property's replacement cost
D) A flat fee of $1,000 per year

Answer 1

FNMA requires sufficient coverage to cover the outstanding mortgage balance on a property.

Step-by-step explanation:

The amount of hazard insurance required on a property by FNMA (Fannie Mae) is sufficient coverage to cover the outstanding mortgage balance. This means that the insurance should be enough to pay off the remaining loan amount in case of any damage or loss to the property. FNMA wants to ensure that the value of the property is protected and can be used to repay the mortgage if necessary.