HUD CERTIFICATION EXAM 200 ACTUAL QUESTIONS AND
CORRECT ANSWERS WITH RATIONALE LATEST 2026
ALREADY GRADED A+
The HUD Certification Exam is a standardized test for individuals seeking to
become certified housing counselors through the U.S. Department of Housing
and Urban Development. Passing this exam is a core requirement for
certification. It covers six major topics: financial management, property
maintenance, responsibilities of homeownership and tenancy, housing laws
and requirements, housing affordability, and avoidance of delinquency and
default. Candidates must work for a HUD-approved housing counseling
agency and complete the required training modules before taking the exam.
1. Under the Fair Housing Act, which protected class was added by the Fair
Housing Amendments Act of 1988?
A) Race
B) Sex
C) Handicap and familial status
D) National origin
Answer: C
Rationale: The Fair Housing Amendments Act of 1988 added handicap (disability)
and familial status (presence of children under 18) to the original seven protected
classes (race, color, religion, sex, and national origin).
2. What is the maximum percent of area median income allowable for a household
to qualify for a Housing Choice Voucher?
A) 30%
B) 50%
C) 80%
D) 100%
Answer: B
Rationale: To qualify for a Housing Choice Voucher (Section 8), a household's
income must typically be at or below 50% of the area median income, with
preference often given to those at or below 30% of AMI (extremely low income).
3. Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan?
,A) Retirement plan statement
B) Current lease
C) Pay stub
D) List of assets
Answer: C
Rationale: A pay stub provides current, verifiable income information, which is
essential for calculating gross monthly income and determining housing
affordability.
4. Which is the maximum recommended housing ratio for renting an apartment?
A) 28%
B) 30%
C) 31%
D) 43%
Answer: B
Rationale: The affordable front-end ratio (housing ratio) for renters is generally
30% of gross monthly income. This is a standard guideline used by housing
counselors and landlords to determine rental affordability.
5. Eligibility requirements for down-payment assistance programs include which
factors?
A) Credit score only
B) Income and purchase price
C) Income, home-buyer education, and purchase price
D) Employment history only
Answer: C
Rationale: Down-payment assistance programs typically require applicants to meet
income limits, complete home-buyer education, and stay within the maximum
allowable purchase price of the home.
6. A client wants to purchase a home within one year and is motivated to increase
household income to save for a down payment. Which is the best solution for the
client to reach this goal?
A) Borrow from retirement fund
B) Sell major assets
C) Find a second job
D) Find a temporary job through a staffing service
Answer: C
,Rationale: A second job provides a sustainable and verifiable source of additional
income that can be used for saving and may also improve debt-to-income ratios for
loan qualification.
7. A credit report may contain which information?
A) Income history
B) Criminal record
C) The number of accounts in collection status
D) A history of payments on an electric bill
Answer: C
Rationale: Credit reports include information on accounts that have been placed in
collections. They do not typically include income history, criminal records, or
utility payment history (though some newer reporting models may include
utilities).
8. A credit report contains inaccurate information. Which action item should the
counselor include in the Client Action Plan?
A) Attach a letter to mortgage applications explaining the inaccuracies
B) Investigate the reasons why the inaccuracies occurred
C) File a dispute with the appropriate credit reporting agency
D) Include a personal consumer statement on the credit report
Answer: C
Rationale: Under the Fair Credit Reporting Act (FCRA), consumers have the right
to dispute incomplete or inaccurate information. The appropriate first step is to file
a dispute with the credit reporting agency (Equifax, Experian, or TransUnion) that
issued the report.
9. Six months ago a client left a job as a reporter to start a business. The client
closed credit card accounts and has been using savings to pay down debt. What
might result from the client closing the credit card accounts?
A) It decreases credit utilization, causing a negative impact on the credit score
B) It increases credit utilization, causing a negative impact on the credit score
C) It increases credit utilization, causing a positive impact on the credit score
D) It decreases credit utilization, causing a positive impact on the credit score
Answer: B
Rationale: Closing credit card accounts reduces the total available credit, which
increases the credit utilization ratio (the amount of debt divided by available
credit). A higher utilization rate can negatively impact the credit score.
10. Which action would a client take to improve a credit score?
, A) Request to expunge public records
B) Cancel all credit cards
C) Pay delinquent accounts
D) Apply for new credit cards to increase credit
Answer: C
Rationale: Paying delinquent accounts is one of the most effective ways to improve
a credit score as it reduces outstanding debt and negative collection items. This
action demonstrates responsible credit management.
11. A client does not receive a written monthly statement from the credit card
company. Which credit law could this omission violate?
A) Fair Credit Reporting Act (FCRA)
B) Fair Credit Billing Act (FCBA)
C) Fair Housing Act
D) Fair and Accurate Credit Transactions Act (FACTA)
Answer: B
Rationale: The Fair Credit Billing Act (FCBA) requires credit card companies to
provide written monthly statements and outlines procedures for disputing billing
errors. Failure to provide statements violates this law.
12. A client shopping for a mortgage loan presents an offer with a 7.5% interest
rate for a 30-year fixed mortgage with a 20% down payment required. The client
asks the housing counselor if the offer is a case of illegal predatory lending. How
should the housing counselor respond?
A) "You have been a victim of predatory lending and should file a report."
B) "The loan seems reasonable. You might do better, but I cannot steer you to any
particular loan originator."
C) "I am unable to determine whether the loan is predatory, but I suggest you sho p
around with other lending sources."
D) "I cannot offer legal advice, but I would not proceed with the loan."
Answer: C
Rationale: Housing counselors cannot offer legal advice or determine if a loan is
predatory without a full analysis. The appropriate response is to suggest the client
shop around with other lenders to compare terms and ensure they are getting a
competitive offer.
13. A landlord refuses to rent to a family with three children because the unit is a
one-bedroom. Is this legal?
A) Yes, reasonable occupancy standards can limit children
B) No, it is familial status discrimination
CORRECT ANSWERS WITH RATIONALE LATEST 2026
ALREADY GRADED A+
The HUD Certification Exam is a standardized test for individuals seeking to
become certified housing counselors through the U.S. Department of Housing
and Urban Development. Passing this exam is a core requirement for
certification. It covers six major topics: financial management, property
maintenance, responsibilities of homeownership and tenancy, housing laws
and requirements, housing affordability, and avoidance of delinquency and
default. Candidates must work for a HUD-approved housing counseling
agency and complete the required training modules before taking the exam.
1. Under the Fair Housing Act, which protected class was added by the Fair
Housing Amendments Act of 1988?
A) Race
B) Sex
C) Handicap and familial status
D) National origin
Answer: C
Rationale: The Fair Housing Amendments Act of 1988 added handicap (disability)
and familial status (presence of children under 18) to the original seven protected
classes (race, color, religion, sex, and national origin).
2. What is the maximum percent of area median income allowable for a household
to qualify for a Housing Choice Voucher?
A) 30%
B) 50%
C) 80%
D) 100%
Answer: B
Rationale: To qualify for a Housing Choice Voucher (Section 8), a household's
income must typically be at or below 50% of the area median income, with
preference often given to those at or below 30% of AMI (extremely low income).
3. Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan?
,A) Retirement plan statement
B) Current lease
C) Pay stub
D) List of assets
Answer: C
Rationale: A pay stub provides current, verifiable income information, which is
essential for calculating gross monthly income and determining housing
affordability.
4. Which is the maximum recommended housing ratio for renting an apartment?
A) 28%
B) 30%
C) 31%
D) 43%
Answer: B
Rationale: The affordable front-end ratio (housing ratio) for renters is generally
30% of gross monthly income. This is a standard guideline used by housing
counselors and landlords to determine rental affordability.
5. Eligibility requirements for down-payment assistance programs include which
factors?
A) Credit score only
B) Income and purchase price
C) Income, home-buyer education, and purchase price
D) Employment history only
Answer: C
Rationale: Down-payment assistance programs typically require applicants to meet
income limits, complete home-buyer education, and stay within the maximum
allowable purchase price of the home.
6. A client wants to purchase a home within one year and is motivated to increase
household income to save for a down payment. Which is the best solution for the
client to reach this goal?
A) Borrow from retirement fund
B) Sell major assets
C) Find a second job
D) Find a temporary job through a staffing service
Answer: C
,Rationale: A second job provides a sustainable and verifiable source of additional
income that can be used for saving and may also improve debt-to-income ratios for
loan qualification.
7. A credit report may contain which information?
A) Income history
B) Criminal record
C) The number of accounts in collection status
D) A history of payments on an electric bill
Answer: C
Rationale: Credit reports include information on accounts that have been placed in
collections. They do not typically include income history, criminal records, or
utility payment history (though some newer reporting models may include
utilities).
8. A credit report contains inaccurate information. Which action item should the
counselor include in the Client Action Plan?
A) Attach a letter to mortgage applications explaining the inaccuracies
B) Investigate the reasons why the inaccuracies occurred
C) File a dispute with the appropriate credit reporting agency
D) Include a personal consumer statement on the credit report
Answer: C
Rationale: Under the Fair Credit Reporting Act (FCRA), consumers have the right
to dispute incomplete or inaccurate information. The appropriate first step is to file
a dispute with the credit reporting agency (Equifax, Experian, or TransUnion) that
issued the report.
9. Six months ago a client left a job as a reporter to start a business. The client
closed credit card accounts and has been using savings to pay down debt. What
might result from the client closing the credit card accounts?
A) It decreases credit utilization, causing a negative impact on the credit score
B) It increases credit utilization, causing a negative impact on the credit score
C) It increases credit utilization, causing a positive impact on the credit score
D) It decreases credit utilization, causing a positive impact on the credit score
Answer: B
Rationale: Closing credit card accounts reduces the total available credit, which
increases the credit utilization ratio (the amount of debt divided by available
credit). A higher utilization rate can negatively impact the credit score.
10. Which action would a client take to improve a credit score?
, A) Request to expunge public records
B) Cancel all credit cards
C) Pay delinquent accounts
D) Apply for new credit cards to increase credit
Answer: C
Rationale: Paying delinquent accounts is one of the most effective ways to improve
a credit score as it reduces outstanding debt and negative collection items. This
action demonstrates responsible credit management.
11. A client does not receive a written monthly statement from the credit card
company. Which credit law could this omission violate?
A) Fair Credit Reporting Act (FCRA)
B) Fair Credit Billing Act (FCBA)
C) Fair Housing Act
D) Fair and Accurate Credit Transactions Act (FACTA)
Answer: B
Rationale: The Fair Credit Billing Act (FCBA) requires credit card companies to
provide written monthly statements and outlines procedures for disputing billing
errors. Failure to provide statements violates this law.
12. A client shopping for a mortgage loan presents an offer with a 7.5% interest
rate for a 30-year fixed mortgage with a 20% down payment required. The client
asks the housing counselor if the offer is a case of illegal predatory lending. How
should the housing counselor respond?
A) "You have been a victim of predatory lending and should file a report."
B) "The loan seems reasonable. You might do better, but I cannot steer you to any
particular loan originator."
C) "I am unable to determine whether the loan is predatory, but I suggest you sho p
around with other lending sources."
D) "I cannot offer legal advice, but I would not proceed with the loan."
Answer: C
Rationale: Housing counselors cannot offer legal advice or determine if a loan is
predatory without a full analysis. The appropriate response is to suggest the client
shop around with other lenders to compare terms and ensure they are getting a
competitive offer.
13. A landlord refuses to rent to a family with three children because the unit is a
one-bedroom. Is this legal?
A) Yes, reasonable occupancy standards can limit children
B) No, it is familial status discrimination
