HUD CERTIFICATION FINAL EXAM ACTUAL QUESTIONS
AND ANSWERS GRADED A+
✔✔Which action taken by a housing counseling agency would affirmatively further fair
housing?
A- Report potential violations to the local fair housing authority
B- Create an outreach campaign designed to raise awareness about critical housing
topics
C- Accompany clients when viewing properties to ensure they are treated fairly
D- Discourage tenants from seeking housing with landlords who appear to consistently
engage in discriminatory practices - ✔✔B- Create an outreach campaign designed to
raise awareness about critical housing topics
✔✔Which section of a credit report shows a client's payment history? - ✔✔Account
information
✔✔Which is the maximum payment (rounded to the nearest dollar) for principal,
interest, taxes, insurance, and association fees (PITIA) this client can afford according
to FHA back-end ratio guidelines?
Assets, $58200, Total Gross Monthly Income $6400 Debt Expenses $615, Household
Expenses $4679 - ✔✔$2137
NOTE: The back-end ratio includes total principal, interest, taxes, and insurance, plus
other monthly debt. The maximum back-end ratio for FHA is 43%. The client's total
monthly income is $6,400, and her total monthly debt is $615. Forty-three percent of
$6,400 is $2,752. Subtracting the total monthly debt from $2,752, the remainder is
$2,137, which is the maximum total principal, interest, taxes, insurance, and association
fees (PITIA) payment.
Reference: Module 2.1 Renting vs. Buying
Page Number 21 to 24
✔✔Which is the down payment required if the client purchases a $375,000 home with
an FHA mortgage? - ✔✔$13,125
NOTE: The down payment would be 3.5% of the $375,000 purchase price, which is
$13,125 ($375,000 multiplied by 0.035 equals $13,125).
✔✔The client attempted to purchase a condo six months ago but was denied. The
mortgage required a minimum credit score of 640, 3% down payment and a 35% front-
end ratio and a 43% back-end ratio. The purchase price was $225,000 with a down
payment of $45,000, monthly principal and interest payment of $939, property taxes of
$196 and a homeowner association fee of $228 for a total monthly payment of $1,363.
During the intake process, she was asked about her children and her responsibilities as
,a mother. Which government rule or regulation may have been violated when the loan
officer denied the loan for the
condo? - ✔✔Fair Housing Act
NOTE: The Fair Housing Act prohibits housing discrimination and protects seven
characteristics: race, religion, color, national origin, familial status, disability, and sex. In
this situation, the loan officer appears to have denied the loan based on the client's
familial status.
✔✔The client has recently replaced her sewer lines. Which is the best information a
housing counselor should
provide this client who still worries about sewer backup and is considering flood
insurance to cover potential
damage?
A- Homeowners who do not live in designated high-risk flood zones should not consider
purchasing flood
insurance.
B- The new sewer lines are covered by a warranty.
C- Flood insurance policies do not cover water that comes from inside a home.
D- The client's contents insurance will cover her losses. - ✔✔C- Flood insurance
policies do not cover water that comes from inside a home.
✔✔The client's child and a friend are severely injured in the client's home. Which claim
is most likely covered under
her homeowners' insurance?
A- A claim to repair damage to the home
B- A claim for medical payments of the client's child only
C- A claim for medical payments of the friend only
D- A claim for medical payments for both children - ✔✔C- A claim for medical payments
of the friend only
✔✔The client finally leaves her home and moves to a rental and is concerned about
being displaced if the apartment becomes unlivable. Which is the best advice the
counselor can provide?
A- Have a designated emergency credit card
B- Purchase a renters insurance policy that only covers contents and personal liability
C- Plan to apply rent payments to hotel expenses
D- Purchase a renters insurance policy that includes loss-of-use coverage - ✔✔D-
Purchase a renters insurance policy that includes loss-of-use coverage
✔✔Which is the best advice a housing counselor can give this client who is concerned
about high heating bills and wants information on how to plan for home maintenance?
, A- Create a list of each key system in her home with target dates for maintenance and
replacement
B- Use emergency funds to deal with system maintenance and replacement
C- Purchase a home warranty annually to ensure her home is properly protected from
maintenance costs
D- Do maintenance and replacement only when they lead to significant financial tax
benefits - ✔✔A- Create a list of each key system in her home with target dates for
maintenance and replacement
✔✔Which is the best initial advice a housing counselor can provide if the client needs to
replace old windows in her home?
A- Explore an FHA Energy Efficiency loan
B- Advise the client to replace one window at a time so the project is more affordable
C- Visit ready.gov to learn about home energy improvement projects
D- Hire a home energy efficiency inspector - ✔✔A- Explore an FHA Energy Efficiency
loan
✔✔The client later purchases a home that was built in 1935. There have been several
sewer backups, and the client was told that the pipes are clay and tree roots have
grown into the pipes and are causing the blockage. The recommendation is to replace
the pipes with PVC, with an estimated cost of $6,000. Another recommendation is to
replace the old galvanized pipes with copper pipes with an estimated cost of $7,000.
The client also mentioned the huge cost in heating bills. The windows in the home are
the original windows.
Which is the best advice a housing counselor can offer for this client to prepare and
save for major household
repairs? - ✔✔Create a system maintenance plan
✔✔Which action could assist this client in addressing her current maintenance
concerns?
A- Install window insulation kits
B- Install an ENERGY STAR qualified water heater
C- Install low-flow toilets
D- Plant shrubs and trees to provide shade - ✔✔A- Install window insulation kits
✔✔Which is the best advice a housing counselor can provide to this client who missed
a few mortgage payments, if she wants to refinance at a lower rate to
avoid missing additional payments?
A- Discuss alternatives as refinancing is not likely to be approved
B- Discourage refinancing as it cannot help a client avoid foreclosure
AND ANSWERS GRADED A+
✔✔Which action taken by a housing counseling agency would affirmatively further fair
housing?
A- Report potential violations to the local fair housing authority
B- Create an outreach campaign designed to raise awareness about critical housing
topics
C- Accompany clients when viewing properties to ensure they are treated fairly
D- Discourage tenants from seeking housing with landlords who appear to consistently
engage in discriminatory practices - ✔✔B- Create an outreach campaign designed to
raise awareness about critical housing topics
✔✔Which section of a credit report shows a client's payment history? - ✔✔Account
information
✔✔Which is the maximum payment (rounded to the nearest dollar) for principal,
interest, taxes, insurance, and association fees (PITIA) this client can afford according
to FHA back-end ratio guidelines?
Assets, $58200, Total Gross Monthly Income $6400 Debt Expenses $615, Household
Expenses $4679 - ✔✔$2137
NOTE: The back-end ratio includes total principal, interest, taxes, and insurance, plus
other monthly debt. The maximum back-end ratio for FHA is 43%. The client's total
monthly income is $6,400, and her total monthly debt is $615. Forty-three percent of
$6,400 is $2,752. Subtracting the total monthly debt from $2,752, the remainder is
$2,137, which is the maximum total principal, interest, taxes, insurance, and association
fees (PITIA) payment.
Reference: Module 2.1 Renting vs. Buying
Page Number 21 to 24
✔✔Which is the down payment required if the client purchases a $375,000 home with
an FHA mortgage? - ✔✔$13,125
NOTE: The down payment would be 3.5% of the $375,000 purchase price, which is
$13,125 ($375,000 multiplied by 0.035 equals $13,125).
✔✔The client attempted to purchase a condo six months ago but was denied. The
mortgage required a minimum credit score of 640, 3% down payment and a 35% front-
end ratio and a 43% back-end ratio. The purchase price was $225,000 with a down
payment of $45,000, monthly principal and interest payment of $939, property taxes of
$196 and a homeowner association fee of $228 for a total monthly payment of $1,363.
During the intake process, she was asked about her children and her responsibilities as
,a mother. Which government rule or regulation may have been violated when the loan
officer denied the loan for the
condo? - ✔✔Fair Housing Act
NOTE: The Fair Housing Act prohibits housing discrimination and protects seven
characteristics: race, religion, color, national origin, familial status, disability, and sex. In
this situation, the loan officer appears to have denied the loan based on the client's
familial status.
✔✔The client has recently replaced her sewer lines. Which is the best information a
housing counselor should
provide this client who still worries about sewer backup and is considering flood
insurance to cover potential
damage?
A- Homeowners who do not live in designated high-risk flood zones should not consider
purchasing flood
insurance.
B- The new sewer lines are covered by a warranty.
C- Flood insurance policies do not cover water that comes from inside a home.
D- The client's contents insurance will cover her losses. - ✔✔C- Flood insurance
policies do not cover water that comes from inside a home.
✔✔The client's child and a friend are severely injured in the client's home. Which claim
is most likely covered under
her homeowners' insurance?
A- A claim to repair damage to the home
B- A claim for medical payments of the client's child only
C- A claim for medical payments of the friend only
D- A claim for medical payments for both children - ✔✔C- A claim for medical payments
of the friend only
✔✔The client finally leaves her home and moves to a rental and is concerned about
being displaced if the apartment becomes unlivable. Which is the best advice the
counselor can provide?
A- Have a designated emergency credit card
B- Purchase a renters insurance policy that only covers contents and personal liability
C- Plan to apply rent payments to hotel expenses
D- Purchase a renters insurance policy that includes loss-of-use coverage - ✔✔D-
Purchase a renters insurance policy that includes loss-of-use coverage
✔✔Which is the best advice a housing counselor can give this client who is concerned
about high heating bills and wants information on how to plan for home maintenance?
, A- Create a list of each key system in her home with target dates for maintenance and
replacement
B- Use emergency funds to deal with system maintenance and replacement
C- Purchase a home warranty annually to ensure her home is properly protected from
maintenance costs
D- Do maintenance and replacement only when they lead to significant financial tax
benefits - ✔✔A- Create a list of each key system in her home with target dates for
maintenance and replacement
✔✔Which is the best initial advice a housing counselor can provide if the client needs to
replace old windows in her home?
A- Explore an FHA Energy Efficiency loan
B- Advise the client to replace one window at a time so the project is more affordable
C- Visit ready.gov to learn about home energy improvement projects
D- Hire a home energy efficiency inspector - ✔✔A- Explore an FHA Energy Efficiency
loan
✔✔The client later purchases a home that was built in 1935. There have been several
sewer backups, and the client was told that the pipes are clay and tree roots have
grown into the pipes and are causing the blockage. The recommendation is to replace
the pipes with PVC, with an estimated cost of $6,000. Another recommendation is to
replace the old galvanized pipes with copper pipes with an estimated cost of $7,000.
The client also mentioned the huge cost in heating bills. The windows in the home are
the original windows.
Which is the best advice a housing counselor can offer for this client to prepare and
save for major household
repairs? - ✔✔Create a system maintenance plan
✔✔Which action could assist this client in addressing her current maintenance
concerns?
A- Install window insulation kits
B- Install an ENERGY STAR qualified water heater
C- Install low-flow toilets
D- Plant shrubs and trees to provide shade - ✔✔A- Install window insulation kits
✔✔Which is the best advice a housing counselor can provide to this client who missed
a few mortgage payments, if she wants to refinance at a lower rate to
avoid missing additional payments?
A- Discuss alternatives as refinancing is not likely to be approved
B- Discourage refinancing as it cannot help a client avoid foreclosure
