HUD Housing Counseling Exam Questions With Verified Answers

Which document should the counselor review with the client to identify spending habits and track expenses? A. Credit report B. Pay stubs C. Bank Statement D. Tax returns - Answer Bank Statement Which additional information would the housing counselor need to prepare a household budget for this client? A. Net Income B. Lease Documentation C. Credit Score D. Bankruptcy Discharge - Answer Net Income Which item in the client's budget is a fixed expense? A. Food B. Gasoline C. Car Lease Payment D. Utilities - Answer Car Lease Payment What is the maximum percent of area median income allowable for household to qualify for a Housing Choice Voucher? - Answer 50% Which is the the maximum recommended housing ratio for renting an apartment? - Answer 30% Eligibility requirements for downpayment assistance programs include which factors? - Answer Income, homebuyer education, purchase price The client is considering an FHA mortgage. What is the upfront mortgage premium (UFMIP) for a FHA mortgage? - Answer 1.75% The client decides to purchase a townhouse through a down payment assistance program with a recapture clause. Three years later, the client remarries, and his wife owns a single family home. Which situation might cause accelerated loan payment? A. Client moves to his wife's home and the townhouse loan is assumed by an eligible buyer. B. Client's wife moves into the townhouse. C. Client moves to his wife's home and rents his townhouse to a tenant. - Answer Client moves to his wife's home and rents his townhouse to a tenant If a client was denied a mortgage loan and the lender told him to come back after his divorce has been final for three years, what is the best advice for the housing counselor to provide to the client? A. Contact the FTC as the lender's action might violate the Equal Credit Opportunity Act. B. Contact the local fair housing center as the lender's action might violate the Fair Housing Act. - Answer Contact the FTC as the lender's action might violate the Equal Credit Opportunity Act A question from a lender on which topic would be inappropriate? - Answer Medical History What is the responsibility of a housing counselor? - Answer Educate homebuyers about their rights. In order to minimize the impact on the client's credit score, what is the maximum time frame within which the client should apply for pre-approval from multiple lenders? - Answer A 30-day period Which is a responsibility of a home inspector? - Answer Evaluate the condition of a home, examine mechanical systems, identify items to be repaired or replaced. Which is the best reason that a housing counselor would suggest that a client speak to three to five different lenders before choosing one? - Answer So the client can compare loan estimates Which is the best advice that a housing counselor can give the client to protect against identity theft? - Answer Review credit report at least once per year The client tells the lender that he is expecting a raise soon. Which action should the lender take? - Answer Provide a loan estimate without factoring in the raise If the client obtains a mortage of $100,000, typically, how much should he expect to pay for closing costs? A. $400 B. $12,000 C. $4,000 D. $1,000 - Answer $4,000 The client is considering renting an apartment with a different landlord. Which would be an upfront cost of moving to a new apartment? A. Down Payment B. Application Fee C. Attorney's Fee D. Maintenance - Answer Application Fee The client is second guessing his decision to buy a home, so the counselor asks a series of questions. Which response would best align with the homeownership option for this client? - Answer Client wants to customize his home with do-it-yourself projects What is the maximum mortgage payment (rounded to the nearest dollar) for which this client would qualify using a standard conventional loan? - Answer $1,065 Which steps should the housing counselor take to assess the client's readiness to purchase a home? - Answer Assess funds available for upfront costs, Calculate debt-to-income ratio, Determine maximum housing payment Which is the maximum debt-to-income ratio allowable for an FHA loan? - Answer 43% With a monthly mortgage payment of $950, which is the clients debt to income ratio? Client currently leases a car for $435 a month and would like to buy a new car. He has been working as a teacher for five years and earn $50,000 a year. - Answer 33% If the client seeks an FHA Energy Efficient Mortgage (EEM) loan, what is the maximum housing payment for which he can qualify (rounded to the nearest dollar)? - Answer $1,375 On which factor is a borrower's annual mortgage insurance premium (MIP) based? - Answer Current principal balance Which is the upfront mortgage insurance premium (UFMIP) if the client purchase a home with an FHA loan amount of $116,000? - Answer $2,030 The client only tracks bill payments. Which should the housing counselor recommend to help the client begin planning for a home purchase? - Answer Track all income and expenses How should a client apply for the Housing Choice Voucher Program? - Answer Contact the local Public Housing Authority Which website provides information on programs to assist homebuyers with down payment assistance? - Answer HUD.gov Based on the client's income ($56,400), savings ($12,000), and credit score (700), which mortgage option is likely best for her? She is purchasing a home for $150,000 or less. - Answer FHA loan