HECM LATEST 2026 TEST PAPER QUESTIONS AND
SOLUTIONS RATED A+
✔✔T/F Agencies are permitted to conduct marketing and outreach including providing
general information about housing opportunities and raising awareness about critical
housing topics. - ✔✔True
✔✔An agency's staff will be required to have an up-to-date knowledge of which of the
following:
A. All FHA Single Family mortgage programs
B.Lender product availability and rate offerings
C.Mortgagee letters
D. HUD's website for information on products and guidelines (www.hud.gov)
E. a , b , c
F. a , c , d - ✔✔F
✔✔T/F To receive a FHA HECM loan, a borrower must first receive One-on-One
Counseling from a certified HECM Counselor. - ✔✔True
✔✔T/F A reverse mortgage counseling agency may charge a fee that exceeds the
actual cost to provide the service but only clients and related parties that are able to
afford the fee. - ✔✔False
✔✔T/F Clients must not be turned away because of an inability to pay counseling fee -
✔✔False
✔✔All are true of entities eligible to provide Reverse Mortgage Counseling EXCEPT:
A.An agency must have an affiliating lending institution in order to stay updated with
updating lending practices.
B. An agency must be have an Active Status on the HECM Roster
C. An agency must receive continuing education every two years
D. An agency must have access to a technology that allows for adequate HUD reporting
- ✔✔A.
✔✔What are the names of the 2 HUD Booklets that each client must receive before
completing a counseling session? - ✔✔Preparing for Your Counseling Session
Use Your Home to Stay at Home - A Guide for Homeowners Who Need Help Now
✔✔Each counseling session must include discussion on all of the following EXCEPT:
A. Basic Requirements to the Reverse Mortgage
B. Alternatives to the Reverse Mortgage
C. Fees and costs associated with the Reverse Mortgage
D. Title retention
E. All of the above - ✔✔E
,✔✔If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what figure are the proposal calculations based on?
A. 625,500
B. 820,000
C. 204,500
D. The answer would depend on the regional lending limit - ✔✔A
✔✔If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what is this calculation called? - ✔✔Maximum Claim Amount (Lending limit is
the same thing)
✔✔T/F Borrowers should be encouraged by their Loan Officer to consult a financial
planner before proceeding with a Reverse Mortgage. - ✔✔False
✔✔T/F Only one of the borrowers that intends to be on the deed after receiving the
reverse mortgage must attend counseling. It is optional for the other borrowers to attend
counseling. - ✔✔False
✔✔T/F For borrowers who lack legal competency, a Power of Attorney may participate
in the counseling session in lieu of the borrower themselves. - ✔✔True
✔✔T/F It is the recommendation of FHA and the agency that non-borrowing spouse
attend counseling but it is not a requirement. - ✔✔True
✔✔T/F The agency is not permitted to provide a copy of the counseling certificate to a
borrower's lender. - ✔✔False.
✔✔What role does FHA (Federal Housing Administration) play in Home Equity
Conversion Mortgages?
A. FHA sells the HECM loans on the secondary market
B. FHA provides a strict rule of guidelines that lenders must adhere to
C. FHA insures HECM loans
D. FHA first instituted but no longer plays any part in HECM loans - ✔✔C
✔✔How is a reverse mortgage payment plan decided?
A. The lender must decide based on the borrower's eligibility
B. The borrower chooses which payment plan works best for them
C. There is no payment plan on a reverse mortgage
D. A reverse mortgage counselor advises the lender on which plan to use - ✔✔B
✔✔All of the following are true EXCEPT:
A. Reverse mortgages can be paid back in periodic increments
, B. A HECM is a "non-recourse" loan which means that repayment is not required until
the last remaining borrower dies
C. Receiving a HECM results in 2 mortgages on the title
D. Only a free and clear title can receive a HECM - ✔✔D
✔✔Principal limit on a HECM loan is best described as:
A. Maximum initial loan amount
B.Maximum loan balance for the life of the loan
C.Maximum home value insured by HUD
D. Appraised value or nation HECM mortgage limit, whichever is less - ✔✔B
✔✔T/F If a public or private non-profit housing counseling agency is not available in a
particular area, it is permissible for local HUD office staff to become trained in order to
counsel prospective HECM borrowers. All HUD offices maintain a staff of trained
counselors. - ✔✔False
✔✔T/F A borrower's first step in receiving a reverse mortgage is to receive counseling
from a certified HECM counselor. - ✔✔True
✔✔T/F It is not permissible for a lender to discuss or disclose estimated loan figures
with a borrower before that borrower receives counseling from a certified HECM
counselor - ✔✔True (California being the only exception)
✔✔Mr. Shadrick has spoken with Bob Loanman about getting a reverse mortgage. Mr.
Shadrick was expected to be at his daughter's wedding in Hawaii so he will be
completing his reverse mortgage counseling on the telephone while on vacation. Before
he goes on vacation he's going to go ahead and get his appraisal inspection done by a
licensed appraiser. What is the best way to describe how the appraisal will be paid for?
A. The lender cannot charge Mr. Shadrick for this appraisal
B.The borrower must pay for the appraisal upfront directly to the appraiser
C. The borrower has the option of paying for the appraisal as a part of the closing costs
when the reverse mortgage is closed
D. The lender is responsible for the appraisal fee in all transactions - ✔✔A
✔✔A HECM counselor must discuss all of the following with a potential borrower
EXCEPT:
A. Financial implications
B. Necessary credit qualifications
C. Alternatives to a HECM
D. Consequences to receiving a HECM - ✔✔B
✔✔T/F Other parties involved in the reverse mortgage transaction including children,
financial advisors, and loan officers are encouraged to participate in the HECM
counseling session. - ✔✔False
SOLUTIONS RATED A+
✔✔T/F Agencies are permitted to conduct marketing and outreach including providing
general information about housing opportunities and raising awareness about critical
housing topics. - ✔✔True
✔✔An agency's staff will be required to have an up-to-date knowledge of which of the
following:
A. All FHA Single Family mortgage programs
B.Lender product availability and rate offerings
C.Mortgagee letters
D. HUD's website for information on products and guidelines (www.hud.gov)
E. a , b , c
F. a , c , d - ✔✔F
✔✔T/F To receive a FHA HECM loan, a borrower must first receive One-on-One
Counseling from a certified HECM Counselor. - ✔✔True
✔✔T/F A reverse mortgage counseling agency may charge a fee that exceeds the
actual cost to provide the service but only clients and related parties that are able to
afford the fee. - ✔✔False
✔✔T/F Clients must not be turned away because of an inability to pay counseling fee -
✔✔False
✔✔All are true of entities eligible to provide Reverse Mortgage Counseling EXCEPT:
A.An agency must have an affiliating lending institution in order to stay updated with
updating lending practices.
B. An agency must be have an Active Status on the HECM Roster
C. An agency must receive continuing education every two years
D. An agency must have access to a technology that allows for adequate HUD reporting
- ✔✔A.
✔✔What are the names of the 2 HUD Booklets that each client must receive before
completing a counseling session? - ✔✔Preparing for Your Counseling Session
Use Your Home to Stay at Home - A Guide for Homeowners Who Need Help Now
✔✔Each counseling session must include discussion on all of the following EXCEPT:
A. Basic Requirements to the Reverse Mortgage
B. Alternatives to the Reverse Mortgage
C. Fees and costs associated with the Reverse Mortgage
D. Title retention
E. All of the above - ✔✔E
,✔✔If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what figure are the proposal calculations based on?
A. 625,500
B. 820,000
C. 204,500
D. The answer would depend on the regional lending limit - ✔✔A
✔✔If the national lending limit is $625,500 and a client's estimated appraised value is
$820,000, what is this calculation called? - ✔✔Maximum Claim Amount (Lending limit is
the same thing)
✔✔T/F Borrowers should be encouraged by their Loan Officer to consult a financial
planner before proceeding with a Reverse Mortgage. - ✔✔False
✔✔T/F Only one of the borrowers that intends to be on the deed after receiving the
reverse mortgage must attend counseling. It is optional for the other borrowers to attend
counseling. - ✔✔False
✔✔T/F For borrowers who lack legal competency, a Power of Attorney may participate
in the counseling session in lieu of the borrower themselves. - ✔✔True
✔✔T/F It is the recommendation of FHA and the agency that non-borrowing spouse
attend counseling but it is not a requirement. - ✔✔True
✔✔T/F The agency is not permitted to provide a copy of the counseling certificate to a
borrower's lender. - ✔✔False.
✔✔What role does FHA (Federal Housing Administration) play in Home Equity
Conversion Mortgages?
A. FHA sells the HECM loans on the secondary market
B. FHA provides a strict rule of guidelines that lenders must adhere to
C. FHA insures HECM loans
D. FHA first instituted but no longer plays any part in HECM loans - ✔✔C
✔✔How is a reverse mortgage payment plan decided?
A. The lender must decide based on the borrower's eligibility
B. The borrower chooses which payment plan works best for them
C. There is no payment plan on a reverse mortgage
D. A reverse mortgage counselor advises the lender on which plan to use - ✔✔B
✔✔All of the following are true EXCEPT:
A. Reverse mortgages can be paid back in periodic increments
, B. A HECM is a "non-recourse" loan which means that repayment is not required until
the last remaining borrower dies
C. Receiving a HECM results in 2 mortgages on the title
D. Only a free and clear title can receive a HECM - ✔✔D
✔✔Principal limit on a HECM loan is best described as:
A. Maximum initial loan amount
B.Maximum loan balance for the life of the loan
C.Maximum home value insured by HUD
D. Appraised value or nation HECM mortgage limit, whichever is less - ✔✔B
✔✔T/F If a public or private non-profit housing counseling agency is not available in a
particular area, it is permissible for local HUD office staff to become trained in order to
counsel prospective HECM borrowers. All HUD offices maintain a staff of trained
counselors. - ✔✔False
✔✔T/F A borrower's first step in receiving a reverse mortgage is to receive counseling
from a certified HECM counselor. - ✔✔True
✔✔T/F It is not permissible for a lender to discuss or disclose estimated loan figures
with a borrower before that borrower receives counseling from a certified HECM
counselor - ✔✔True (California being the only exception)
✔✔Mr. Shadrick has spoken with Bob Loanman about getting a reverse mortgage. Mr.
Shadrick was expected to be at his daughter's wedding in Hawaii so he will be
completing his reverse mortgage counseling on the telephone while on vacation. Before
he goes on vacation he's going to go ahead and get his appraisal inspection done by a
licensed appraiser. What is the best way to describe how the appraisal will be paid for?
A. The lender cannot charge Mr. Shadrick for this appraisal
B.The borrower must pay for the appraisal upfront directly to the appraiser
C. The borrower has the option of paying for the appraisal as a part of the closing costs
when the reverse mortgage is closed
D. The lender is responsible for the appraisal fee in all transactions - ✔✔A
✔✔A HECM counselor must discuss all of the following with a potential borrower
EXCEPT:
A. Financial implications
B. Necessary credit qualifications
C. Alternatives to a HECM
D. Consequences to receiving a HECM - ✔✔B
✔✔T/F Other parties involved in the reverse mortgage transaction including children,
financial advisors, and loan officers are encouraged to participate in the HECM
counseling session. - ✔✔False
