HUD Practice Exam verified questions and answers A+
Grade
What act came about after the assassination of MLK?
- correct answer The Civil Rights Act of 1968
A client does not receive a written monthly statement from the credit card company. Which credit law
could this omission violate?
- correct answer Fair Credit Billing Act
In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated?
- correct answer When weighing housing options
A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage the client
can afford based on income if the client secures a conventional loan?
- correct answer Answer is 728. 40x15=_x52_/12=_.28=728
Front end ratio for Conventional Loan
- correct answer 28%
Back End ratio
- correct answer Only calculate if you have expenses in the problem. Only include debts that appear on
Credit report.
If they say Debt to income ratio :
- correct answer they are looking for Back End Ratio
If it says housing ratio :
- correct answer Calculate front end
, If they say "What is the highest monthly mortgage payment" and they give you expenses:
- correct answer You do both front & back end & choose the lowest total
A client has a monthly household income of $2,300, monthly debt payments of $450, and an optimal
monthly housing ratio of 32%. What is the client's optimal monthly housing payment?
- correct answer 2300-450=_X.32=592
What is the back-end ratio for a client with a monthly housing expense of $1,250, a monthly total of $88
in other consumer debt payments, and a gross household income of $4,460 per month (rounded to the
nearest whole percent)?
- correct answer ANSWER IS 30%
1250+88/4460
How to solve for back end ratio
- correct answer back end ratio = total monthly debt expenses/ gross monthly income
A client earns a salary of $45,000 at a job held for three years. The client has credit card bills, student
loans, and a car loan totaling $500 per month. The client has already saved $3,500 for a down payment
and is using an FHA Energy Efficient Mortgage (EEM).If the client wants to make the minimum down
payment for a home priced at $150,000, how much more does the client need to save?
$1,750
$2,250
$4,500
$5,250
- correct answer Down payment for EEM is 3.5% so you take 150,000 x .035=5250-3500=$1750
EEM
- correct answer Energy Efficient Mortgage
A type of FHA loan
front end: 33%
back end max: 45%
Which type of assistance administered by a public housing authority allows for location flexibility?
Grade
What act came about after the assassination of MLK?
- correct answer The Civil Rights Act of 1968
A client does not receive a written monthly statement from the credit card company. Which credit law
could this omission violate?
- correct answer Fair Credit Billing Act
In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated?
- correct answer When weighing housing options
A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage the client
can afford based on income if the client secures a conventional loan?
- correct answer Answer is 728. 40x15=_x52_/12=_.28=728
Front end ratio for Conventional Loan
- correct answer 28%
Back End ratio
- correct answer Only calculate if you have expenses in the problem. Only include debts that appear on
Credit report.
If they say Debt to income ratio :
- correct answer they are looking for Back End Ratio
If it says housing ratio :
- correct answer Calculate front end
, If they say "What is the highest monthly mortgage payment" and they give you expenses:
- correct answer You do both front & back end & choose the lowest total
A client has a monthly household income of $2,300, monthly debt payments of $450, and an optimal
monthly housing ratio of 32%. What is the client's optimal monthly housing payment?
- correct answer 2300-450=_X.32=592
What is the back-end ratio for a client with a monthly housing expense of $1,250, a monthly total of $88
in other consumer debt payments, and a gross household income of $4,460 per month (rounded to the
nearest whole percent)?
- correct answer ANSWER IS 30%
1250+88/4460
How to solve for back end ratio
- correct answer back end ratio = total monthly debt expenses/ gross monthly income
A client earns a salary of $45,000 at a job held for three years. The client has credit card bills, student
loans, and a car loan totaling $500 per month. The client has already saved $3,500 for a down payment
and is using an FHA Energy Efficient Mortgage (EEM).If the client wants to make the minimum down
payment for a home priced at $150,000, how much more does the client need to save?
$1,750
$2,250
$4,500
$5,250
- correct answer Down payment for EEM is 3.5% so you take 150,000 x .035=5250-3500=$1750
EEM
- correct answer Energy Efficient Mortgage
A type of FHA loan
front end: 33%
back end max: 45%
Which type of assistance administered by a public housing authority allows for location flexibility?
