HUD Housing Counselor Certification Practice
Exam/ 127 Q&A.
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. Should the Lender
provide a Loan Estimate (LE) with, or without factoring the raise? - Answer:
Provide a loan estimate without factoring in the raise
If this client obtains a mortgage of $100,000, typically, how much should he
expect to pay for closing costs? - Answer: $3000 to $4000
Page 1 of 54
,Is Application Fee an upfront cost of clients who are considering renting or buying
a property? - Answer: Renting
A client wants to customize his home with do-it-yourself projects, this is an
indication the client is best aligned with which housing option; Home-ownership
or Renting? - Answer: Home-ownership
The client's gross monthly income is $4167 and the monthly debts are $435. 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
NOTE: The maximum front-end ratio for a standard conventional loan is 28%, and
the back-end ratio is 36%. The front-end ratio is calculated as 28% of the client's
monthly income of $4,167, which is $1,167. The back-end ratio is calculated as
36% of the
client's monthly income of $4,167 minus the client's monthly debt of $435, which
equals $1,065. Therefore, the maximum loan payment that the client qualifies for
is the lower of the two numbers, which is $1,065.
Which is the maximum debt-to-income ratio allowable for an FHA loan? - Answer:
43%
Which is the maximum debt-to-income ratio allowable for an FHA Energy
Efficiency Mortgage loan? - Answer: 45%
Page 2 of 54
,The client's gross monthly income is $4167 and the monthly debts are $435. With
a monthly mortgage payment of $950, which is the client's debt-to-income ratio
(round to the nearest whole percent)? - Answer: 33%
What is the maximum percent of area median income allowable for a household
to qualify for a Housing Choice Voucher? - Answer: 50%
Which is the maximum recommended housing ratio for renting an apartment? -
Answer: 30%
Eligibility requirements for down-payment assistance programs include which
factors? - Answer: Income, home-buyer education, purchase price
The client is considering an FHA mortgage. What is the upfront mortgage
insurance premium (UFMIP) for an
FHA mortgage? - Answer: 1.75%
If the client was denied a mortgage loan and the lender told him to come back
after his divorce had been final for three years, what is the best advice for the
housing counselor to provide to the client to report a violation to ECOA? -
Answer: Contact the Federal Trade Commission as the lender's action might
violate the Equal Credit Opportunity Act
A question from a lender on the client's Medical History would be inappropriate
or appropriate? - Answer: Inappropriate
Page 3 of 54
, Who is responsible for educating home-buyers about their rights? - Answer:
Housing Counselor
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
What are the responsibilities of a home inspector? - Answer: Examine mechanical
systems, Evaluate the condition of a home, 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? - Answer: To compare loan estimates
The client's gross monthly income is $4167 and the monthly debts are $435. 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: $1,292
On which factor is a borrower's annual mortgage insurance premium (MIP) based?
- Answer: Current principal balance
Page 4 of 54
Exam/ 127 Q&A.
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. Should the Lender
provide a Loan Estimate (LE) with, or without factoring the raise? - Answer:
Provide a loan estimate without factoring in the raise
If this client obtains a mortgage of $100,000, typically, how much should he
expect to pay for closing costs? - Answer: $3000 to $4000
Page 1 of 54
,Is Application Fee an upfront cost of clients who are considering renting or buying
a property? - Answer: Renting
A client wants to customize his home with do-it-yourself projects, this is an
indication the client is best aligned with which housing option; Home-ownership
or Renting? - Answer: Home-ownership
The client's gross monthly income is $4167 and the monthly debts are $435. 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
NOTE: The maximum front-end ratio for a standard conventional loan is 28%, and
the back-end ratio is 36%. The front-end ratio is calculated as 28% of the client's
monthly income of $4,167, which is $1,167. The back-end ratio is calculated as
36% of the
client's monthly income of $4,167 minus the client's monthly debt of $435, which
equals $1,065. Therefore, the maximum loan payment that the client qualifies for
is the lower of the two numbers, which is $1,065.
Which is the maximum debt-to-income ratio allowable for an FHA loan? - Answer:
43%
Which is the maximum debt-to-income ratio allowable for an FHA Energy
Efficiency Mortgage loan? - Answer: 45%
Page 2 of 54
,The client's gross monthly income is $4167 and the monthly debts are $435. With
a monthly mortgage payment of $950, which is the client's debt-to-income ratio
(round to the nearest whole percent)? - Answer: 33%
What is the maximum percent of area median income allowable for a household
to qualify for a Housing Choice Voucher? - Answer: 50%
Which is the maximum recommended housing ratio for renting an apartment? -
Answer: 30%
Eligibility requirements for down-payment assistance programs include which
factors? - Answer: Income, home-buyer education, purchase price
The client is considering an FHA mortgage. What is the upfront mortgage
insurance premium (UFMIP) for an
FHA mortgage? - Answer: 1.75%
If the client was denied a mortgage loan and the lender told him to come back
after his divorce had been final for three years, what is the best advice for the
housing counselor to provide to the client to report a violation to ECOA? -
Answer: Contact the Federal Trade Commission as the lender's action might
violate the Equal Credit Opportunity Act
A question from a lender on the client's Medical History would be inappropriate
or appropriate? - Answer: Inappropriate
Page 3 of 54
, Who is responsible for educating home-buyers about their rights? - Answer:
Housing Counselor
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
What are the responsibilities of a home inspector? - Answer: Examine mechanical
systems, Evaluate the condition of a home, 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? - Answer: To compare loan estimates
The client's gross monthly income is $4167 and the monthly debts are $435. 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: $1,292
On which factor is a borrower's annual mortgage insurance premium (MIP) based?
- Answer: Current principal balance
Page 4 of 54
