HUD Practice Test Quizzes and Correct
Answers/ 2024-2025.
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? - Answer: $728
Which type of government insured loan was created for financing homes in rural
areas? - Answer: USDA
A client keeps having budget problems due to unexpected expenses. Which
financial tool would best assist this client to prepare for unexpected expenses and
avoid increasing credit usage? - Answer: Emergency Funds
Page 1 of 16
,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? - Answer: $736
Use Front-End Ratio
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)? - Answer:
30%
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? -
Answer: $1,750
Under which condition would most down payment assistance programs approve a
waiver of the homeownership education requirement? - Answer: Most will not
waive the homeownership education requirement.
Which type of assistance administered by a public housing authority allows for
location flexibility? - Answer: Tenant-based vouchers
Page 2 of 16
, A client's payment history affects which factor of creditworthiness? - Answer:
Character
Which action may a lender take to determine a borrower's character? - Answer:
Call an employer to verify employment
A client is in the process of purchasing a home with a sales price of $162,000. The
client has a net worth of $50,000, a credit score of 680, and a debt-to-income
ratio of 36%. The home has appraised for $155,000. Which factor of
creditworthiness will most likely be an obstacle to purchasing the home? -
Answer: Collateral
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? - Answer: Pay Stub
A client would like to 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? - Answer: Find a second job
A credit report may contain which information? - Answer: The number of
accounts in collection status
Six months ago a client left a job as a reporter to start a
Page 3 of 16
Answers/ 2024-2025.
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? - Answer: $728
Which type of government insured loan was created for financing homes in rural
areas? - Answer: USDA
A client keeps having budget problems due to unexpected expenses. Which
financial tool would best assist this client to prepare for unexpected expenses and
avoid increasing credit usage? - Answer: Emergency Funds
Page 1 of 16
,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? - Answer: $736
Use Front-End Ratio
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)? - Answer:
30%
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? -
Answer: $1,750
Under which condition would most down payment assistance programs approve a
waiver of the homeownership education requirement? - Answer: Most will not
waive the homeownership education requirement.
Which type of assistance administered by a public housing authority allows for
location flexibility? - Answer: Tenant-based vouchers
Page 2 of 16
, A client's payment history affects which factor of creditworthiness? - Answer:
Character
Which action may a lender take to determine a borrower's character? - Answer:
Call an employer to verify employment
A client is in the process of purchasing a home with a sales price of $162,000. The
client has a net worth of $50,000, a credit score of 680, and a debt-to-income
ratio of 36%. The home has appraised for $155,000. Which factor of
creditworthiness will most likely be an obstacle to purchasing the home? -
Answer: Collateral
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? - Answer: Pay Stub
A client would like to 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? - Answer: Find a second job
A credit report may contain which information? - Answer: The number of
accounts in collection status
Six months ago a client left a job as a reporter to start a
Page 3 of 16
