HUD CERTIFICATION EXAM PAPER 2026
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
⩥ A client would like purchase a home within one year. The client is
motivated to increase household income as a way to save for a down
payment and qualify for a loan. Which is the best solution for the client
to reach this goal?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service. Answer: Find a second
job
⩥ A credit report may contain which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
Criminal record. Answer: The number of accounts in collection status
,⩥ A credit report contains inaccurate information. Which action item
should the counselor include in the Client Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the
responsible party.
-Include a personal consumer statement on the credit report.
-File a dispute with the appropriate credit reporting agency.. Answer:
File a dispute with the appropriate credit reporting agency.
⩥ Six months ago a client left a job as a reporter to start a business in the
retail industry. To prepare to buy a house, the client closed credit card
accounts and has been using savings to pay down credit card debt and
collections. The client has not been able to save much for a down
payment with all the debt payments but knows about an affordable
home-ownership program that only requires a 1% down payment with
an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit
score.
-It increases credit utilization, causing a negative impact on the credit
score.
,-It increases credit utilization, causing a positive impact on the credit
score.
-It decreases credit utilization, causing a positive impact on the credit
score.. Answer: It decreases credit utilization, causing a positive impact
on the credit score.
⩥ Which action would a client take to improve a credit score?
-Request to expunge public records
-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts. Answer: Pay delinquent accounts
⩥ A client does not receive a written monthly statement from the credit
card company. Which credit law could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act. Answer: Fair Credit Billing
Act
⩥ A client shopping for a mortgage loan presents a housing counselor
with an offer from a local mortgage lender. The interest rate on the offer
, is 7.5% for a 30-year fixed rate mortgage with a 20% down payment
required. The counselor reviews the client file and determines the client's
credit score is 725 and the client's total debt-to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal
predatory lending. How should the housing counselor respond?
-"You have been a victim of predatory lending and should file a report
with the Consumer Finance Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you
to any particular loan originator."
-"I am unable to determine whether the loan is predatory, but I suggest
you shop around with other lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan.".
Answer: "I am unable to determine whether the loan is predatory, but I
suggest you shop around with other lending sources."
⩥ Which action should a counselor recommend a client take first after
discovering identity theft?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection.. Answer: File an identity theft report.
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
⩥ A client would like purchase a home within one year. The client is
motivated to increase household income as a way to save for a down
payment and qualify for a loan. Which is the best solution for the client
to reach this goal?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service. Answer: Find a second
job
⩥ A credit report may contain which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
Criminal record. Answer: The number of accounts in collection status
,⩥ A credit report contains inaccurate information. Which action item
should the counselor include in the Client Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the
responsible party.
-Include a personal consumer statement on the credit report.
-File a dispute with the appropriate credit reporting agency.. Answer:
File a dispute with the appropriate credit reporting agency.
⩥ Six months ago a client left a job as a reporter to start a business in the
retail industry. To prepare to buy a house, the client closed credit card
accounts and has been using savings to pay down credit card debt and
collections. The client has not been able to save much for a down
payment with all the debt payments but knows about an affordable
home-ownership program that only requires a 1% down payment with
an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit
score.
-It increases credit utilization, causing a negative impact on the credit
score.
,-It increases credit utilization, causing a positive impact on the credit
score.
-It decreases credit utilization, causing a positive impact on the credit
score.. Answer: It decreases credit utilization, causing a positive impact
on the credit score.
⩥ Which action would a client take to improve a credit score?
-Request to expunge public records
-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts. Answer: Pay delinquent accounts
⩥ A client does not receive a written monthly statement from the credit
card company. Which credit law could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act. Answer: Fair Credit Billing
Act
⩥ A client shopping for a mortgage loan presents a housing counselor
with an offer from a local mortgage lender. The interest rate on the offer
, is 7.5% for a 30-year fixed rate mortgage with a 20% down payment
required. The counselor reviews the client file and determines the client's
credit score is 725 and the client's total debt-to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal
predatory lending. How should the housing counselor respond?
-"You have been a victim of predatory lending and should file a report
with the Consumer Finance Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you
to any particular loan originator."
-"I am unable to determine whether the loan is predatory, but I suggest
you shop around with other lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan.".
Answer: "I am unable to determine whether the loan is predatory, but I
suggest you shop around with other lending sources."
⩥ Which action should a counselor recommend a client take first after
discovering identity theft?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection.. Answer: File an identity theft report.
