HUD PRACTICE TEST STUDY GUIDE / 90 + QUESTIONS AND CORRECT ANSWERS 2025/2026 LATEST UPDATE ALREADY GRADED A+.

1. 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 2. A client would like to purchase a home within one year.The client is moti- vated 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 3. A credit report may contain which information? * ANSWER * The number of accounts in collection status 4. Six months ago a client left a job as a reporter to start a business in the retail industry.To prepare to buy a house, the client closed credit card accounts and has been using savings to pay down credit card debt and collections.The client has not been able to save much for a down payment with all the debt payments but knows about an affordable homeownership program that only requires a 1% down payment with an FHA loan.What might result from the client closing the credit card accounts? * ANSWER * It increases credit utilization, causing a negative impact on the credit score. 5. Which action would a client take to improve a credit score? * ANSWER * Pay delinquent accounts 6. A client does not receive a written monthly statement from the credit card company.Which credit law could this omission violate? * ANSWER * Fair Credit Billing Act 7. A clientshopping for a mortgage loan presents a housing counselor with an offer from a local mortgage lender.The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a 20% down payment required.The counselor reviews the client file and determines the client's 3 / 15 credit score is 725 and the client's total debt-to-income ratio is 20%. * ANSWER * "I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources." 8. Which action should a counselor recommend a client take first after discov- ering identity theft? * ANSWER * File an identity theft report 9. In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated? * ANSWER * When weighing housing options 10. 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 *