Free Minnesota Real Estate Practice Exam

Q1.Under the Equal Credit Opportunity Act (ECOA), a lender refuses to provide a mortgage loan to an applicant primarily because the applicant recently went through a divorce and receives alimony as part of their income. Which statement BEST describes this situation?

• A.The lender's decision is lawful because alimony income is considered unstable and unreliable.
• B.The lender's decision is lawful if the applicant cannot document the alimony payments with a court order.
• C.The lender's decision may violate ECOA, which prohibits discrimination based on marital status and requires lenders to consider alimony as income when the applicant chooses to disclose it.
• D.The lender's decision is lawful under RESPA because divorce settlements are excluded from qualifying income calculations.

Q2.A listing agent discovers that the property has environmental contamination issues that could trigger CERCLA liability. What fiduciary duty requires the agent to inform the seller of this discovery?

• A.Obedience
• B.Loyalty
• C.Accounting
• D.Disclosure

Q3.Under Minnesota Rules 2805.3300, a real estate licensee acting as a dual agent in a transaction must:

• A.Obtain written informed consent from both the buyer and seller before proceeding
• B.Notify only the seller, as they are the principal party to the listing agreement
• C.Automatically transition to a facilitator role without disclosure
• D.Withdraw from the transaction and refer both parties to other agents

Q4.A person who believes they have been a victim of housing discrimination must file a complaint with the U.S. Department of Housing and Urban Development (HUD) within how many days of the alleged discriminatory act?

• A.30 days
• B.90 days
• C.180 days
• D.365 days

Q5.A property manager tells a Section 8 voucher holder calling about a vacant 2-bedroom: "We have a maximum of 4 occupants. You have 3 kids, so 5 people total — we can't rent to you." Is this a violation?

• A.No — occupancy limits are neutral and lawful
• B.Yes — this likely violates familial-status protection; HUD's Keating Memo guides that a two-per-bedroom standard is presumptively reasonable for adults but must be applied flexibly given bedroom size, configuration, and state/local codes
• C.Yes — but only because the tenant has a voucher
• D.Yes — but only if the children are under 5

Q6.A licensed contractor in Minnesota completes roofing work on a residential property but is not paid. Under Minnesota law, within what general timeframe must the contractor file a mechanic's lien statement to preserve lien rights against the property?

• A.Within 30 days after the work is completed.
• B.Within 90 days after the last date the contractor furnished labor or materials.
• C.Within 120 days after the last date the contractor furnished labor or materials.
• D.Within one year after the contract was signed.

Q7.A rectangular lot measures 150 feet wide by 200 feet deep. What is the total area of the lot in square feet?

• A.30,000 square feet
• B.350 square feet
• C.15,000 square feet
• D.60,000 square feet

Q8.A deed restriction that prohibits the sale of alcohol on a property is an example of what type of land use control?

• A.Public land use control
• B.Governmental regulation
• C.Zoning ordinance
• D.Private land use control

Q9.A property sells for $250,000. The buyer pays a 20% down payment. What is the loan amount?

• A.$200,000
• B.$50,000
• C.$225,000
• D.$180,000

Q10.In Minnesota, property held under the Torrens system differs from abstract property primarily because Torrens title is established and guaranteed by:

• A.A private title insurance company that issues a policy to the owner
• B.A court-issued Certificate of Title registered with the county registrar of titles
• C.A chain of title recorded in the county recorder's abstract books
• D.The Minnesota Department of Commerce upon application by the owner

Q11.A real estate licensee discovers that a property previously housed a methamphetamine laboratory. Under federal environmental law, which statute would be most relevant for determining potential liability and cleanup requirements?

• A.Resource Conservation and Recovery Act (RCRA)
• B.Clean Air Act
• C.Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
• D.Safe Drinking Water Act

Q12.The Truth-in-Lending Act (TILA) requires lenders to disclose which of the following to borrowers?

• A.The borrower's credit score
• B.The property's appraised value
• C.The Annual Percentage Rate (APR)
• D.The loan officer's commission

Q13.A lender quotes an Annual Percentage Rate (APR) higher than the stated note rate on a residential mortgage. Under the Truth in Lending Act (TILA/Regulation Z), which of the following BEST explains why the APR exceeds the note rate?

• A.The APR incorporates the note rate plus certain finance charges — such as origination fees, discount points, and mortgage broker fees — spread over the loan term, making the true cost of credit higher than the stated interest rate alone.
• B.The APR is required by RESPA to include escrow deposits for property taxes and homeowner's insurance, which inflates the percentage above the note rate.
• C.The APR reflects the lender's secondary market yield requirement, which is always higher than the consumer note rate under Regulation Z.
• D.Federal law mandates that the APR must be at least 0.125% above the note rate to ensure the lender earns a minimum profit margin.

Q14.A commercial property is encumbered by a deed restriction requiring that it be used only for retail purposes. A buyer under contract intends to convert the space into a medical clinic. The broker, aware of the restriction, does not disclose it because the buyer never asked. After closing, the buyer discovers the restriction and suffers financial loss. What is the broker's MOST LIKELY liability outcome?

• A.The broker has no liability because deed restrictions are public record and buyers are presumed to have constructive notice of all recorded documents.
• B.The broker may face liability for fraudulent concealment or negligent misrepresentation because a broker's fiduciary and statutory duty of disclosure generally requires proactive disclosure of known material facts affecting value or use, regardless of whether the buyer asked.
• C.The broker is shielded from liability because RESPA's anti-kickback provisions preempt state-law disclosure claims in commercial transactions.
• D.The broker has no liability because deed restrictions are an equitable remedy enforceable only between the original grantor and grantee.

Q15.Under the Truth-in-Lending Act (TILA), which of the following loan types is generally exempt from disclosure requirements?

• A.Residential mortgage loans
• B.Home equity lines of credit
• C.Consumer credit transactions
• D.Commercial loans over $25,000