HUD Practice Exam/ 89 Q&A/ Newly Updated | 2025 LATEST UPDATED
Which document is most important when working with a client to develop an initial budget as
part of a Client Action Plan? - (answers)List of Assets
Retirement plan statement
Pay stub X
Current lease
A client would like 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? - (answers)
A credit report may contain which information? - (answers)Income history
Criminal record
# of accounts in collection status
A history of payments on an elctric bill
A credit report contains inaccurate information. Which action item should the counselor include
in the Client Action Plan? - (answers)FIle a dispute with the appropaite credit reporting agency
,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? - (answers)
Which action would a client take to improve a credit score? - (answers)
A client does not receive a written monthly statement from the credit card company. Which
credit law could this omission violate? - (answers)FCBA
A client shopping 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
credit score is 725 and the client's total debt-to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal predatory lending. How
should the housing counselor respond? - (answers)I am unable to determine whether the loan is
predatory but i suggest you shop around with other ledning sources
, Which action should a counselor recommend a client take first after discovering identity theft? -
(answers)File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront costs be
evaluated? - (answers)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? - (answers)Front End
Ratio Formula
Conventional = <28%
Which type of government insured loan was created for financing homes in rural areas? -
(answers)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? -
(answers)Emergency Fund
Which document is most important when working with a client to develop an initial budget as
part of a Client Action Plan? - (answers)List of Assets
Retirement plan statement
Pay stub X
Current lease
A client would like 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? - (answers)
A credit report may contain which information? - (answers)Income history
Criminal record
# of accounts in collection status
A history of payments on an elctric bill
A credit report contains inaccurate information. Which action item should the counselor include
in the Client Action Plan? - (answers)FIle a dispute with the appropaite credit reporting agency
,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? - (answers)
Which action would a client take to improve a credit score? - (answers)
A client does not receive a written monthly statement from the credit card company. Which
credit law could this omission violate? - (answers)FCBA
A client shopping 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
credit score is 725 and the client's total debt-to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal predatory lending. How
should the housing counselor respond? - (answers)I am unable to determine whether the loan is
predatory but i suggest you shop around with other ledning sources
, Which action should a counselor recommend a client take first after discovering identity theft? -
(answers)File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront costs be
evaluated? - (answers)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? - (answers)Front End
Ratio Formula
Conventional = <28%
Which type of government insured loan was created for financing homes in rural areas? -
(answers)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? -
(answers)Emergency Fund
