HUD HOUSING COUNSELOR CERTIFICATION PRACTICE QUESTIONS WITH CORRECT ANSWERS 2025

HUD HOUSING COUNSELOR CERTIFICATION
PRACTICE QUESTIONS WITH CORRECT
ANSWERS 2025
WhatRisRtheRmaximumRpercentRofRareaRmedianRincomeRallowableRforRaRhouseholdRtoRqualifyRforRaRHousin
gRChoiceRVoucher?R-RCORRECTRANSWERR-50%



WhichRisRtheRmaximumRrecommendedRhousingRratioRforRrentingRanRapartment?R-RCORRECTRANSWERR-
30%



EligibilityRrequirementsRforRdown-paymentRassistanceRprogramsRincludeRwhichRfactors?R-
RCORRECTRANSWERR-Income,Rhome-buyerReducation,RpurchaseRprice




TheRclientRisRconsideringRanRFHARmortgage.RWhatRisRtheRupfrontRmortgageRinsuranceRpremiumR(UFMIP)Rfo
rRan

FHARmortgage?R-RCORRECTRANSWERR-1.75%



IfRtheRclientRwasRdeniedRaRmortgageRloanRandRtheRlenderRtoldRhimRtoRcomeRbackRafterRhisRdivorceRhadRbee
nRfinalRforRthreeRyears,RwhatRisRtheRbestRadviceRforRtheRhousingRcounselorRtoRprovideRtoRtheRclientRtoRrepor
tRaRviolationRtoRECOA?R-RCORRECTRANSWERR-
ContactRtheRFederalRTradeRCommissionRasRtheRlender'sRactionRmightRviolateRtheREqualRCreditROpportunityR
Act



ARquestionRfromRaRlenderRonRtheRclient'sRMedicalRHistoryRwouldRbeRinappropriateRorRappropriate?R-
RCORRECTRANSWERR-Inappropriate




WhoRisRresponsibleRforReducatingRhome-buyersRaboutRtheirRrights?R-RCORRECTRANSWERR-
HousingRCounselor



InRorderRtoRminimizeRtheRimpactRonRtheRclient'sRcreditRscore,RwhatRisRtheRmaximumRtimeRframeRwithinRwhi
chRtheRclientRshouldRapplyRforRpre-approvalRfromRmultipleRlenders?R-RCORRECTRANSWERR-AR30-dayRperiod

,WhatRareRtheRresponsibilitiesRofRaRhomeRinspector?R-RCORRECTRANSWERR-
ExamineRmechanicalRsystems,REvaluateRtheRconditionRofRaRhome,RIdentifyRitemsRtoRbeRrepairedRorRreplace
d



WhichRisRtheRbestRreasonRthatRaRhousingRcounselorRwouldRsuggestRthatRaRclientRspeakRtoRthreeRtoRfiveRdiff
erentRlenders?R-RCORRECTRANSWERR-ToRcompareRloanRestimates



WhichRisRtheRbestRadviceRthatRaRhousingRcounselorRcanRgiveRtheRclientRtoRprotectRagainstRidentityRtheft?R-
RCORRECTRANSWERR-ReviewRcreditRreportRatRleastRonceRperRyear




TheRclientRtellsRtheRlenderRthatRheRisRexpectingRaRraiseRsoon.RShouldRtheRLenderRprovideRaRLoanREstimateR(
LE)Rwith,RorRwithoutRfactoringRtheRraise?R-RCORRECTRANSWERR-
ProvideRaRloanRestimateRwithoutRfactoringRinRtheRraise



IfRthisRclientRobtainsRaRmortgageRofR$100,000,Rtypically,RhowRmuchRshouldRheRexpectRtoRpayRforRclosingRco
sts?R-RCORRECTRANSWERR-$3000RtoR$4000



IsRApplicationRFeeRanRupfrontRcostRofRclientsRwhoRareRconsideringRrentingRorRbuyingRaRproperty?R-
RCORRECTRANSWERR-Renting




ARclientRwantsRtoRcustomizeRhisRhomeRwithRdo-it-
yourselfRprojects,RthisRisRanRindicationRtheRclientRisRbestRalignedRwithRwhichRhousingRoption;RHome-
ownershipRorRRenting?R-RCORRECTRANSWERR-Home-ownership



TheRclient'sRgrossRmonthlyRincomeRisR$4167RandRtheRmonthlyRdebtsRareR$435.RWhatRisRtheRmaximumRmor
tgageRpaymentR(roundedRtoRtheRnearestRdollar)RforRwhichRthisRclientRwouldRqualifyRusingRaRstandardRconv
entionalRloan?R-RCORRECTRANSWERR-$1,065

NOTE:RTheRmaximumRfront-endRratioRforRaRstandardRconventionalRloanRisR28%,RandRtheRback-
endRratioRisR36%.RTheRfront-
endRratioRisRcalculatedRasR28%RofRtheRclient'sRmonthlyRincomeRofR$4,167,RwhichRisR$1,167.RTheRback-
endRratioRisRcalculatedRasR36%RofRthe

client'sRmonthlyRincomeRofR$4,167RminusRtheRclient'sRmonthlyRdebtRofR$435,RwhichRequalsR$1,065.RTheref
ore,RtheRmaximumRloanRpaymentRthatRtheRclientRqualifiesRforRisRtheRlowerRofRtheRtwoRnumbers,RwhichRisR$
1,065.

,WhichRisRtheRmaximumRdebt-to-incomeRratioRallowableRforRanRFHARloan?R-RCORRECTRANSWERR-43%



WhichRisRtheRmaximumRdebt-to-incomeRratioRallowableRforRanRFHAREnergyREfficiencyRMortgageRloan?R-
RCORRECTRANSWERR-45%




TheRclient'sRgrossRmonthlyRincomeRisR$4167RandRtheRmonthlyRdebtsRareR$435.RWithRaRmonthlyRmortgageR
paymentRofR$950,RwhichRisRtheRclient'sRdebt-to-incomeRratioR(roundRtoRtheRnearestRwholeRpercent)?R-
RCORRECTRANSWERR-33%




TheRclient'sRgrossRmonthlyRincomeRisR$4167RandRtheRmonthlyRdebtsRareR$435.RIfRtheRclientRseeksRanRFHARE
nergyREfficientRMortgageR(EEM)Rloan,RwhatRisRtheRmaximumRhousingRpaymentRforRwhichRheRcanRqualifyR(r
oundedRtoRtheRnearestRdollar)?R-RCORRECTRANSWERR-$1,292



OnRwhichRfactorRisRaRborrower'sRannualRmortgageRinsuranceRpremiumR(MIP)Rbased?R-
RCORRECTRANSWERR-CurrentRprincipalRbalance




NOTE:RTheRannualRmortgageRinsuranceRpremiumR(MIP)RisRbasedRonRtheRunpaidRprincipalRbalanceRofRtheRlo
an.RTheRloan-to-
valueRratioRisRusedRtoRdetermineRwhenRprivateRmortgageRinsuranceR(PMI)RcanRbeRdroppedRfromRtheRloan.R
CreditRscoresRdoRnotRaffectRMIPRbutRmightRaffectRPMI.



WhichRisRtheRupfrontRmortgageRinsuranceRpremiumR(UFMIP)RifRtheRclientRpurchasesRaRhomeRwithRanRFHARl
oanRamountRofR$116,000?R-RCORRECTRANSWERR-$2,030



TheRclientRonlyRtracksRbillRpayments.RWhichRshouldRtheRhousingRcounselorRrecommendRtoRhelpRtheRclientR
begin

planningRforRaRhomeRpurchase?



A-RContinueRtoRtrackRbillRpaymentsRonly

B-RTrackRincomeRonly

C-RTrackRallRincomeRandRexpenses

D-RTrackRsavingsRdepositsRandRexpensesR-RCORRECTRANSWERR-C-RTrackRallRincomeRandRexpenses

, HowRshouldRaRclientRapplyRforRtheRHousingRChoiceRVoucherRProgram?R-RCORRECTRANSWERR-
ContactRtheRlocalRPublicRHousingRAuthority



WhichRwebsiteRprovidesRinformationRonRprogramsRtoRassistRhome-
buyersRwithRdownRpaymentRassistance?R-RCORRECTRANSWERR-HUD.gov



BasedRonRtheRclient'sRincomeRofR$56,400RperRyearRof,RsavingsRofR12,000RtowardRaRdownRpayment,RandRcre
ditRscoreRofR700,RwhichRmortgageRoptionRisRlikelyRbestRforRher;RConventionalRloan,RFHARloan,RUSDARRuralRD
evelopmentRloan,RorRSubprimeRloan?R-RCORRECTRANSWERR-ConventionalRloan



ThisRclientRisRdeniedRaRloanRtoRpurchaseRaRhomeRbecauseRsheRhasRnotRlivedRinRtheRcountryRforRatRleastRtenR
years.RWhichRActRisRthisRadverseRactionRviolating,RandRwhereRshouldRtheRclientRreportRthisRactionRto?R-
RCORRECTRANSWERR-

ReportRtheRactionRtoRtheRFederalRTradeRCommission,RitRisRaRviolationRofRtheREqualRCreditROpportunityRAct



IfRtheRclientRsubmitsRaRloanRapplication,RwhichRdocumentRshouldRsheRreceiveRwithinRthreeRbusinessRdays?R
-RCORRECTRANSWERR-LoanREstimate



WhatRisRaRpre-approvalRfromRaRlender?R-RCORRECTRANSWERR-
WhenRtheRlenderRcommitsRtoRlendRaRfixedRamountRbasedRonRaRreviewRofRtheRclient'sRapplication.



ARclientRhasRbeenRaRparalegalRforRfiveRyearsRandRearnsR$56,400RperRyear.RSheRhasRbeenRworkingRpart-
timeRatRanRiceRcreamRparlorRforRtheRpastRfewRsummersRtoRsaveRforRherRfirstRhome.RNowRthatRsheRhasRsaved
R$12,000RtowardRaRdownRpayment,RsheRnoRlongerRneedsRtoRworkRaRsecondRjob.RInRtheRnextRthreeRmonths,R

theRclientRwouldRlikeRtoRbuyRaRsingle-familyRhomeRnearRaRgoodRschoolRforRlessRthanR$150,000.R



DoesRthisRclientRmeetRaRlender'sRexpectationRforRcontinuedRemployment?R-RCORRECTRANSWERR-
Yes,RbecauseRtheRclientRhasRbeenRatRherRjobRoverRtwoRyears



InRreviewingRaRloanRestimate,RtheRhousingRcounselorRfindsRfeesRforRservicesRthatRseemRunnecessary.RWhat
RisRtheRmostRlikelyRexplanationRforRtheseRfees?RChooseRone:




A-RPredatoryRlendingRpractices

B-RSubprimeRmortgageRterms