HUD CERTIFICATION EXAMINATION SET 2025/2026
QUESTIONS WITH ANSWERS RATED A+
✔✔In reviewing a loan estimate, the housing counselor finds fees for services that seem
unnecessary. What is the most likely explanation for these fees? Choose one:
A- Predatory lending practices
B- Subprime mortgage terms
C- Regional lending considerations
D- Variation in lending practices - ✔✔A- Predatory lending practices
✔✔The client thinks her cost of living is going to be the same because her mortgage
payment and her rental payment are comparable. What are three recurring costs
associated with home-ownership that are not part of home rental?
A- Homeowners insurance, property taxes, home repairs
B- Property taxes, renters insurance, utility bill
C- Utility bill, car insurance, renters insurance
D- Car insurance, property taxes, cable bill - ✔✔Homeowners insurance, property
taxes, home repairs
✔✔Which additional information should the housing counselor request from the client to
determine her readiness to purchase a home? Choose One:
A- Planned family size
B- Current lease
C- Pre-qualification letter
D- Expenses - ✔✔D- Expenses
✔✔A client has been a paralegal for five years and earns $56,400 per year. She has
been working part-time at an ice cream parlor for the past few summers to save for her
first home. Now that she has saved $12,000 toward a down payment, she no longer
needs to work a second job. In the next three months, the client would like to buy a
single-family home near a good school for less than $150,000.
What is this client's maximum mortgage payment if the lender's housing ratio is 28
percent (round to the nearest
dollar)? - ✔✔$1,316
✔✔Which is the minimum percentage of the purchase price that the client needs to
make as a down payment to avoid having to pay mortgage insurance with a
conventional mortgage? - ✔✔20%
✔✔Which factor determines whether the client will have to pay private mortgage
insurance versus mortgage
insurance premium?
,A- Size of loan
B- Credit score
C- Type of loan
D- Loan-to-value ratio - ✔✔C- Type of loan
✔✔The client would like to purchase a single-family home. Prices in the area where she
would like to live are around $450,000. She has $45,000 left from the life insurance
settlement and she has saved an additional $5,000. She typically saves $500 per
month, but when she has unexpected expenses she is unable to save. Because she
takes her children to school, she usually stops on her way to work for breakfast.
A- Earned Income Tax Credit
B- Child and Dependent Care Tax Credit
C- Energy tax credit
D- Educational tax credit - ✔✔B- Child and Dependent Care Tax Credit
✔✔The client currently keeps the $45,000 remaining from the life insurance settlement
in a regular checking
account. Her goal is to use this money towards her down payment. Which action should
the housing counselor suggest to this client?
A- Move the funds into a mutual fund
B- Move funds to a large purchase savings account with limited accessibility
C- Leave the money in her current checking account for easy access
D- Move funds into a long-term Certificate of Deposit - ✔✔Move funds to a large
purchase savings account with limited accessibility
✔✔The client wants to move her family to a lower-priced rental unit to save money for a
home, but is struggling with the upfront fees required to move to a new apartment
complex. Which strategy would be most effective to help the client secure affordable
housing and cover moving expenses quickly?
A- Submit application for a housing voucher
B- Find an individual landlord and negotiate
C- Save for the move instead of paying utilities
D- Apply for a loan to cover expenses - ✔✔Find an individual landlord and negotiate
✔✔Which type of lease and tenancy best protects the tenant?
A- An oral lease with tenancy at will
B- A written lease with contractual tenancy
C- A written lease with tenancy at will
D- An oral lease with tenancy at sufferance - ✔✔A written lease with contractual
tenancy
, ✔✔The client wants to purchase a new home, but her lease might expire before she
can move into it. Which is the
best advice for the housing counselor to provide?
A- Discuss a tenancy-at-sufferance agreement with the current landlord
B- Stay in her current unit until the landlord evicts her
C- Find a seller who will allow her to move in before closing
D- Contact local Public Housing Agencies - ✔✔A- Discuss a tenancy-at-sufferance
agreement with the current landlord
✔✔Which tactic would be most effective for the client to encourage a positive landlord-
tenant experience during a tenant initiated early lease termination?
A- Stop paying rent immediately
B- Request return of the security deposit
C- Leave furniture for an incoming tenant
D- Communicate well with the landlord - ✔✔D- Communicate well with the landlord
✔✔Which additional information would the housing counselor need to prepare the
action plan for this client?
A- Documentation of life insurance payout
B- Client's current lease agreement
C- Documentation of household expenses
D- Listings for properties the client is interested in purchasing - ✔✔Documentation of
household expenses
✔✔Which is the best recommendation the housing counselor should give this client to
help improve her credit score?
A- Set up automatic credit card and loan payments to ensure on time payment
B- Apply for a loan to consolidate the credit card and auto loan balances
C- Apply for a credit card with a lower interest rate and transfer the balance of the
current card
D- Pay more than the minimum payment each month to reduce the credit card balance -
✔✔D- Pay more than the minimum payment each month to reduce the credit card
balance
✔✔Which factor would most likely impact the client's housing affordability in the future?
A- A reduction in income when the survivor benefit runs out when children turn 18
B- The need for a second car when the children start to drive
C- Selecting a 30-year fixed rate mortgage versus a 15-year fixed rate mortgage
QUESTIONS WITH ANSWERS RATED A+
✔✔In reviewing a loan estimate, the housing counselor finds fees for services that seem
unnecessary. What is the most likely explanation for these fees? Choose one:
A- Predatory lending practices
B- Subprime mortgage terms
C- Regional lending considerations
D- Variation in lending practices - ✔✔A- Predatory lending practices
✔✔The client thinks her cost of living is going to be the same because her mortgage
payment and her rental payment are comparable. What are three recurring costs
associated with home-ownership that are not part of home rental?
A- Homeowners insurance, property taxes, home repairs
B- Property taxes, renters insurance, utility bill
C- Utility bill, car insurance, renters insurance
D- Car insurance, property taxes, cable bill - ✔✔Homeowners insurance, property
taxes, home repairs
✔✔Which additional information should the housing counselor request from the client to
determine her readiness to purchase a home? Choose One:
A- Planned family size
B- Current lease
C- Pre-qualification letter
D- Expenses - ✔✔D- Expenses
✔✔A client has been a paralegal for five years and earns $56,400 per year. She has
been working part-time at an ice cream parlor for the past few summers to save for her
first home. Now that she has saved $12,000 toward a down payment, she no longer
needs to work a second job. In the next three months, the client would like to buy a
single-family home near a good school for less than $150,000.
What is this client's maximum mortgage payment if the lender's housing ratio is 28
percent (round to the nearest
dollar)? - ✔✔$1,316
✔✔Which is the minimum percentage of the purchase price that the client needs to
make as a down payment to avoid having to pay mortgage insurance with a
conventional mortgage? - ✔✔20%
✔✔Which factor determines whether the client will have to pay private mortgage
insurance versus mortgage
insurance premium?
,A- Size of loan
B- Credit score
C- Type of loan
D- Loan-to-value ratio - ✔✔C- Type of loan
✔✔The client would like to purchase a single-family home. Prices in the area where she
would like to live are around $450,000. She has $45,000 left from the life insurance
settlement and she has saved an additional $5,000. She typically saves $500 per
month, but when she has unexpected expenses she is unable to save. Because she
takes her children to school, she usually stops on her way to work for breakfast.
A- Earned Income Tax Credit
B- Child and Dependent Care Tax Credit
C- Energy tax credit
D- Educational tax credit - ✔✔B- Child and Dependent Care Tax Credit
✔✔The client currently keeps the $45,000 remaining from the life insurance settlement
in a regular checking
account. Her goal is to use this money towards her down payment. Which action should
the housing counselor suggest to this client?
A- Move the funds into a mutual fund
B- Move funds to a large purchase savings account with limited accessibility
C- Leave the money in her current checking account for easy access
D- Move funds into a long-term Certificate of Deposit - ✔✔Move funds to a large
purchase savings account with limited accessibility
✔✔The client wants to move her family to a lower-priced rental unit to save money for a
home, but is struggling with the upfront fees required to move to a new apartment
complex. Which strategy would be most effective to help the client secure affordable
housing and cover moving expenses quickly?
A- Submit application for a housing voucher
B- Find an individual landlord and negotiate
C- Save for the move instead of paying utilities
D- Apply for a loan to cover expenses - ✔✔Find an individual landlord and negotiate
✔✔Which type of lease and tenancy best protects the tenant?
A- An oral lease with tenancy at will
B- A written lease with contractual tenancy
C- A written lease with tenancy at will
D- An oral lease with tenancy at sufferance - ✔✔A written lease with contractual
tenancy
, ✔✔The client wants to purchase a new home, but her lease might expire before she
can move into it. Which is the
best advice for the housing counselor to provide?
A- Discuss a tenancy-at-sufferance agreement with the current landlord
B- Stay in her current unit until the landlord evicts her
C- Find a seller who will allow her to move in before closing
D- Contact local Public Housing Agencies - ✔✔A- Discuss a tenancy-at-sufferance
agreement with the current landlord
✔✔Which tactic would be most effective for the client to encourage a positive landlord-
tenant experience during a tenant initiated early lease termination?
A- Stop paying rent immediately
B- Request return of the security deposit
C- Leave furniture for an incoming tenant
D- Communicate well with the landlord - ✔✔D- Communicate well with the landlord
✔✔Which additional information would the housing counselor need to prepare the
action plan for this client?
A- Documentation of life insurance payout
B- Client's current lease agreement
C- Documentation of household expenses
D- Listings for properties the client is interested in purchasing - ✔✔Documentation of
household expenses
✔✔Which is the best recommendation the housing counselor should give this client to
help improve her credit score?
A- Set up automatic credit card and loan payments to ensure on time payment
B- Apply for a loan to consolidate the credit card and auto loan balances
C- Apply for a credit card with a lower interest rate and transfer the balance of the
current card
D- Pay more than the minimum payment each month to reduce the credit card balance -
✔✔D- Pay more than the minimum payment each month to reduce the credit card
balance
✔✔Which factor would most likely impact the client's housing affordability in the future?
A- A reduction in income when the survivor benefit runs out when children turn 18
B- The need for a second car when the children start to drive
C- Selecting a 30-year fixed rate mortgage versus a 15-year fixed rate mortgage
