HUD Practice
Comprehensive Resource To Help You Ace 2026-2027 Exams
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!! Current Update!!
1. 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? - Correct Answer: Front End Ratio Formula
Conventional = <28%
2. Which type of government insured loan was created for financing homes in
rural areas? - Correct Answer: USDA
3. 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? - Correct Answer:
Emergency Fund
4. 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? - Correct Answer: Front
End Ratio Formula
,5. 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)? - Correct Answer: Debt to income ratio or back end
ratio
6. 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).
7. 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? - Correct
Answer: FHA downpayment is at least 3.5%
8. Under which condition would most down payment assistance programs
approve a waiver of the homeownership education requirement? -
Correct Answer: Most will not waive the homeownership education
requirement
9. Which type of assistance administered by a public housing authority allows
for location flexibility? - Correct Answer: Project based vouchers 2.2-23
10.A client's payment history affects which factor of creditworthiness? -
Correct Answer: Character
,11.Which action may a lender take to determine a borrower's character? -
Correct Answer: Call an employer to verify employment
12.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? - Correct Answer: Capacity
13.When a lender inquires about how much money a borrower has saved for a
down payment on a home, what factor is being considered? - Correct
Answer: Capital
14.A first-time buyer wants a conventional loan but does not have the assets to
qualify. This client may have to purchase with an FHA loan unless the client
saves more money. Which of the Four C's of Credit does this involve? -
Correct Answer: Capital
15.Which describes a homebuyer who would be ineligible as a first-time
homebuyer, as defined by most down payment assistance programs? -
Correct Answer: A client who lost a home to foreclosure two years ago
16.Which step does a homebuyer complete in the process of purchasing a
home? - Correct Answer: Get a home inspection
, 17.A counselor's understanding of the client's spending habits and use of
credit are most important in which step of the homebuying process? -
Correct Answer: Determining if homeownership is right for the client
18.Which charge cannot change from the Loan Estimate to the Closing
Disclosure? - Correct Answer: Fees paid to the lender
19.Which is the minimum qualifying credit score for an FHA mortgage if the
client made a 3.5% down payment? - Correct Answer: 640
A client has saved money for a small down payment and closing costs to
purchase a $100,000 home in the city. The client is deciding whether to begin the
homebuying process now or continue saving for a larger down payment.
Client Profile
► Credit Score - 700
► Monthly income - $3,000
► Savings - $15,000
Types of Loans - LTV (%)
► Traditional conventional loan - 80%
► Conventional/piggyback - 80%/10%
► Conventional loan - 90%
► FHA loan - 96.5%
Comprehensive Resource To Help You Ace 2026-2027 Exams
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!! Current Update!!
1. 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? - Correct Answer: Front End Ratio Formula
Conventional = <28%
2. Which type of government insured loan was created for financing homes in
rural areas? - Correct Answer: USDA
3. 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? - Correct Answer:
Emergency Fund
4. 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? - Correct Answer: Front
End Ratio Formula
,5. 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)? - Correct Answer: Debt to income ratio or back end
ratio
6. 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).
7. 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? - Correct
Answer: FHA downpayment is at least 3.5%
8. Under which condition would most down payment assistance programs
approve a waiver of the homeownership education requirement? -
Correct Answer: Most will not waive the homeownership education
requirement
9. Which type of assistance administered by a public housing authority allows
for location flexibility? - Correct Answer: Project based vouchers 2.2-23
10.A client's payment history affects which factor of creditworthiness? -
Correct Answer: Character
,11.Which action may a lender take to determine a borrower's character? -
Correct Answer: Call an employer to verify employment
12.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? - Correct Answer: Capacity
13.When a lender inquires about how much money a borrower has saved for a
down payment on a home, what factor is being considered? - Correct
Answer: Capital
14.A first-time buyer wants a conventional loan but does not have the assets to
qualify. This client may have to purchase with an FHA loan unless the client
saves more money. Which of the Four C's of Credit does this involve? -
Correct Answer: Capital
15.Which describes a homebuyer who would be ineligible as a first-time
homebuyer, as defined by most down payment assistance programs? -
Correct Answer: A client who lost a home to foreclosure two years ago
16.Which step does a homebuyer complete in the process of purchasing a
home? - Correct Answer: Get a home inspection
, 17.A counselor's understanding of the client's spending habits and use of
credit are most important in which step of the homebuying process? -
Correct Answer: Determining if homeownership is right for the client
18.Which charge cannot change from the Loan Estimate to the Closing
Disclosure? - Correct Answer: Fees paid to the lender
19.Which is the minimum qualifying credit score for an FHA mortgage if the
client made a 3.5% down payment? - Correct Answer: 640
A client has saved money for a small down payment and closing costs to
purchase a $100,000 home in the city. The client is deciding whether to begin the
homebuying process now or continue saving for a larger down payment.
Client Profile
► Credit Score - 700
► Monthly income - $3,000
► Savings - $15,000
Types of Loans - LTV (%)
► Traditional conventional loan - 80%
► Conventional/piggyback - 80%/10%
► Conventional loan - 90%
► FHA loan - 96.5%
