Certified Housing Counselor Exam 2026-
2027: 111 Practice Questions & Answers |
HUD Certification Test Prep
Description:
Pass the 2026-2027 HUD Housing Counselor certification exam with 111 realistic practice
questions covering fair housing, FHA loans, loss mitigation, credit scoring, and TRID
rules. Detailed answers and explanations included.
Download the complete 2026/2027 study guide today and pass on your first attempt.
, Housing Counselor Exam 2026-2027 Practice Test
Section 1: Budget Development and Client Action Plans
Question 1
When developing an initial budget as part of a Client Action Plan, which document provides
the most essential information for accurately assessing a client's income?
A. Bank statement
B. Pay stub
C. Credit report
D. Tax return
Answer: B
Explanation: The pay stub provides current, verifiable income information including gross
earnings, deductions, and net pay. This document offers the most immediate and accurate
snapshot of a client's actual income for budget planning purposes, whereas bank statements
may include non-income deposits and tax returns reflect historical rather than current
earnings.
Question 2
A client with monthly household income
of 2,300hasmonthlydebtpaymentsof2,300hasmonthlydebtpaymentsof450. With an optimal
monthly housing ratio of 32 percent, what is the client's optimal monthly housing payment?
A. 736B.736B.592
C. 850D.850D.650
Answer: A
Explanation: The front-end ratio (housing ratio) is calculated by multiplying gross monthly
income by the target percentage. For this client: 2,300×0.32=2,300×0.32=736. This
represents the maximum recommended monthly housing expense including principal,
interest, taxes, and insurance (PITI).
,Question 3
A client working 40 hours per week at $15 per hour seeks to determine the highest monthly
mortgage affordable based on income for a conventional loan. Which calculation provides the
correct maximum?
A. 1,040B.1,040B.728
C. 936D.936D.520
Answer: B
Explanation: Monthly gross income is 40 hours
× 15×52weeks÷12months=15×52weeks÷12months=2,600. Conventional loans typically
follow the 28 percent front-end ratio guideline. Therefore, 2,600×0.28=2,600×0.28=728
maximum monthly housing payment.
Section 2: Credit Management and Scoring Factors
Question 4
A client left a reporting job six months ago to start a retail business. To prepare for home
purchase, the client closed credit card accounts and has used savings to pay down debt and
collections. The client cannot save for a down payment due to debt payments but qualifies for
an affordable program requiring only 1 percent down with an FHA loan. What is the likely
consequence of closing the credit card accounts?
A. It reduces available credit, improving the debt-to-income ratio
B. It increases credit utilization, causing negative credit score impact
C. It removes negative payment history from the credit report
D. It automatically increases the credit score by reducing available debt
Answer: B
Explanation: Closing credit card accounts reduces total available credit while outstanding
balances remain unchanged, increasing the credit utilization ratio. Utilization above 30
percent typically damages credit scores. This action can be counterproductive when preparing
for mortgage qualification.
, Question 5
Which information may appear on a credit report?
A. Criminal history
B. Medical records
C. Number of accounts in collection status
D. Employment performance evaluations
Answer: C
Explanation: Credit reports contain factual information about credit accounts, including
payment history, current status, and collection accounts. The number of accounts in
collection status directly impacts creditworthiness and appears on standard credit reports
from the three major bureaus.
Question 6
To improve a credit score, which action should a client take first?
A. Open new credit card accounts
B. Close unused credit cards
C. Pay delinquent accounts
D. Request credit limit increases
Answer: C
Explanation: Paying delinquent accounts addresses the most significant factor in credit
scoring: payment history, which accounts for approximately 35 percent of the FICO score.
Bringing accounts current stops negative reporting and begins the recovery process.
Question 7
A client does not receive a written monthly statement from a credit card company. Which
credit law may have been violated?
A. Truth in Lending Act
B. Fair Credit Reporting Act
C. Fair Credit Billing Act
D. Credit Card Accountability Responsibility and Disclosure Act
2027: 111 Practice Questions & Answers |
HUD Certification Test Prep
Description:
Pass the 2026-2027 HUD Housing Counselor certification exam with 111 realistic practice
questions covering fair housing, FHA loans, loss mitigation, credit scoring, and TRID
rules. Detailed answers and explanations included.
Download the complete 2026/2027 study guide today and pass on your first attempt.
, Housing Counselor Exam 2026-2027 Practice Test
Section 1: Budget Development and Client Action Plans
Question 1
When developing an initial budget as part of a Client Action Plan, which document provides
the most essential information for accurately assessing a client's income?
A. Bank statement
B. Pay stub
C. Credit report
D. Tax return
Answer: B
Explanation: The pay stub provides current, verifiable income information including gross
earnings, deductions, and net pay. This document offers the most immediate and accurate
snapshot of a client's actual income for budget planning purposes, whereas bank statements
may include non-income deposits and tax returns reflect historical rather than current
earnings.
Question 2
A client with monthly household income
of 2,300hasmonthlydebtpaymentsof2,300hasmonthlydebtpaymentsof450. With an optimal
monthly housing ratio of 32 percent, what is the client's optimal monthly housing payment?
A. 736B.736B.592
C. 850D.850D.650
Answer: A
Explanation: The front-end ratio (housing ratio) is calculated by multiplying gross monthly
income by the target percentage. For this client: 2,300×0.32=2,300×0.32=736. This
represents the maximum recommended monthly housing expense including principal,
interest, taxes, and insurance (PITI).
,Question 3
A client working 40 hours per week at $15 per hour seeks to determine the highest monthly
mortgage affordable based on income for a conventional loan. Which calculation provides the
correct maximum?
A. 1,040B.1,040B.728
C. 936D.936D.520
Answer: B
Explanation: Monthly gross income is 40 hours
× 15×52weeks÷12months=15×52weeks÷12months=2,600. Conventional loans typically
follow the 28 percent front-end ratio guideline. Therefore, 2,600×0.28=2,600×0.28=728
maximum monthly housing payment.
Section 2: Credit Management and Scoring Factors
Question 4
A client left a reporting job six months ago to start a retail business. To prepare for home
purchase, the client closed credit card accounts and has used savings to pay down debt and
collections. The client cannot save for a down payment due to debt payments but qualifies for
an affordable program requiring only 1 percent down with an FHA loan. What is the likely
consequence of closing the credit card accounts?
A. It reduces available credit, improving the debt-to-income ratio
B. It increases credit utilization, causing negative credit score impact
C. It removes negative payment history from the credit report
D. It automatically increases the credit score by reducing available debt
Answer: B
Explanation: Closing credit card accounts reduces total available credit while outstanding
balances remain unchanged, increasing the credit utilization ratio. Utilization above 30
percent typically damages credit scores. This action can be counterproductive when preparing
for mortgage qualification.
, Question 5
Which information may appear on a credit report?
A. Criminal history
B. Medical records
C. Number of accounts in collection status
D. Employment performance evaluations
Answer: C
Explanation: Credit reports contain factual information about credit accounts, including
payment history, current status, and collection accounts. The number of accounts in
collection status directly impacts creditworthiness and appears on standard credit reports
from the three major bureaus.
Question 6
To improve a credit score, which action should a client take first?
A. Open new credit card accounts
B. Close unused credit cards
C. Pay delinquent accounts
D. Request credit limit increases
Answer: C
Explanation: Paying delinquent accounts addresses the most significant factor in credit
scoring: payment history, which accounts for approximately 35 percent of the FICO score.
Bringing accounts current stops negative reporting and begins the recovery process.
Question 7
A client does not receive a written monthly statement from a credit card company. Which
credit law may have been violated?
A. Truth in Lending Act
B. Fair Credit Reporting Act
C. Fair Credit Billing Act
D. Credit Card Accountability Responsibility and Disclosure Act
