Certified Occupancy Specialist (COS) Practice Exam 2025 – 200 Questions with Answers and Rationales | Verified Answers | Already Graded A+ | Latest Version

Certified Occupancy Specialist (COS) Practice
Exam 2025 – 200 Questions with Answers and
Rationales | Verified Answers | Already Graded
A+ | Latest Version

covering:
 Annual vs. adjusted income
 Deductions and medical/disability rules
 Verification and documentation
 Eligibility and household composition
 Rent, utility allowances, HAP
 Recertifications and compliance
 Assets and disposals
 Fair housing and accommodations
 COS role and exam strategy



1. Annual vs. Adjusted Income (30 questions)

1. Annual income for HUD purposes is defined as:

 A. Income received only by the head of household

 B. Taxable income as defined by the IRS

 C. All amounts, monetary or not, that go to or are received by the family
head, spouse, or other household members

,  D. Earned income minus taxes
Correct answer: C
Annual income under HUD Handbook 4350.3 includes all cash and non-cash
amounts received by all household members, with specific exclusions.

2. Adjusted income is:

 A. Annual income plus HUD deductions

 B. Monthly income multiplied by 12

 C. Annual income minus allowable HUD deductions

 D. Earned income minus taxes
Adjusted income is calculated by subtracting HUD-authorized deductions
(such as dependent, elderly/disabled and certain medical expenses) from the
household’s annual income.

3. Which of the following is excluded from annual income?

 A. Regular wages

 B. Unemployment compensation

 C. Earned income of a minor (under 18) who is not the head or spouse

 D. Child support
HUD excludes earned income of minors other than head or spouse from
annual income; unearned income of minors is included.

4. Periodic payments from Social Security are:

 A. Always excluded

 B. Included in annual income

,  C. Included only if the resident requests

 D. Counted only at recertification
Social Security (OASDI, SSDI) benefits are included in annual income unless
specifically excluded (e.g., certain lump sums).

5. Lump-sum Social Security back payments are generally:

 A. Counted as annual income in full

 B. Excluded from annual income but may affect assets if retained

 C. Counted over the period they cover

 D. Counted only if more than $5,000
Most retroactive Social Security lump sums are treated as assets if retained,
not as income for the certification period.

6. Regular child support payments received by the household:

 A. Are excluded

 B. Are counted only if court-ordered

 C. Are included in annual income, whether court-ordered or voluntary

 D. Are counted as assets
Child support is included as income if it is received, regardless of
enforcement method.

7. How should sporadic gifts from family (holiday or occasional cash gifts) be treated?

 A. Always included

 B. Generally excluded if they are infrequent, non-recurring gifts

 C. Counted if more than $200 per gift

,  D. Counted as assets
Infrequent, non-recurring gifts are excluded; regular, predictable contributions
would be included as income.

8. Earned income from a live-in aide:

 A. Is always excluded from family annual income

 B. Is included if over minimum wage

 C. Is included if aide is related

 D. Is counted as asset income
Live-in aides are not considered household members; their income is
excluded.

9. Income from a foster child:

 A. Is excluded from annual income

 B. Is included as dependent income

 C. Is counted if foster child is under 18

 D. Is counted only for LIHTC
Foster children and foster adults are not counted as family members; their
income is excluded.

10. Which household member’s income is always counted if they reside in the unit?

 A. Minor under 18

 B. Head of household

 C. Temporary visitor