HUD Practice Test Questions and Answers Verified 100% Correct

HUD Practice Test Questions and Answers Verified 100% Correct What is the purpose of the Veterans Affairs Supportive Housing (VASH) program? - ANSWER To end veteran homelessness A tenant's apartment building has been sold. The new owners have informed the tenant that the rent will immediately increase by $100 a month despite having four months left on the written lease. Which best describes the situation? - ANSWER New landlord has to honor the existing lease Which is a typical responsibility of a landlord? - ANSWER Repairing a leak in the roof A client is currently renting month to month (tenancy at sufferance). What advice should a housing counselor recommend to better secure the housing? - ANSWER Seek a new written lease agreement Which circumstance is generally covered by renter's insurance? - ANSWER A pipe burst in the apartment above the tenant's unit and causes water damage to the tenant's personal belongings. Which family is most likely to qualify for the Earned Income Tax Credit (EITC)? - ANSWER A individual employed part time in a minimum wage job Delinquency on which type of payment can cause a lien to be placed on a client's property? - ANSWER Homeowners association dues Which is a possible outcome for member residents if a homeowners association (HOA) imposes a community assessment? - ANSWER Residents would be required to pay a share of expenses related to capital improvements to the common areas. A homeowner has decided to remodel the basement over the next 12 months. The project should cost just under $24,000, and the hope is to borrow the money at a very low interest rate that can be paid off over a longer period of time. Which home financing option would work best? - ANSWER HELOC A potential homebuyer with minimal savings for a down payment and a low credit score is most likely to qualify for which mortgage? - ANSWER USDA Which is the most significant benefit of using a real estate agent? - ANSWER Negotiating the sale Which item is critical to consider when working with a client to prepare a household system maintenance plan? - ANSWER Target replacement date Which strategy most effectively increases a home's energy efficiency? - ANSWER Increase attic insulation Which best describes the ENERGY STAR program? - ANSWER A voluntary program that helps businesses and individuals save money and protect the climate through superior energy efficiency. Which action would most likely increase the energy efficiency of a home? - ANSWER Repair caulking on windows. Which should a housing counselor recommend that a client include in a household maintenance plan? - ANSWER Coverages for home warranty Which item should be included in an emergency preparedness plan? - ANSWER Identify a meeting location outside the immediate area. A client with limited financial resources wants to improve safety in the home to prepare for natural disasters. Which is the best resource for the client to use in researching this topic? - ANSWER R Which would be the best location to identify in a household emergency preparedness plan as a safe place to meet in the event of an evacuation? - ANSWER A motel in a neighboring community What was the primary purpose of the Making Home Affordable program? - ANSWER To assist homeowners in avoiding foreclosure The terms Ability to Repay and Qualified Mortgage were defined in regulations implemented by the Consumer Finance Protection Bureau (CFPB) because of what industry wide problem? - ANSWER Subprime lending Two homeowners are making adjustments to household spending. Their Client Action Plans outline several potential steps. Based on the action steps for each client, what might a housing counselor assume? - ANSWER Client 2 is more likely to be in either default or imminent default. What should a counselor and tenant focus on when developing an emergency budget? - ANSWER Increasing income and decreasing expenses A client is delinquent on the mortgage and at risk of default. The client is considering signing the deed over to a real estate investor to avoid foreclosure. What should the housing counselor recommend? - ANSWER Advise against signing over the deed to a real estate investor as a solution to avoid foreclosure. Which option would be most likely to require that the mortgage is current for eligibility? - ANSWER Refinance A family suffers a loss of income due to unemployment and is now facing a pending foreclosure. After reviewing the family's budget, the housing counselor learns that the family has a negative cash flow of almost $300. The housing counselor recommends adjusting expenses, which results in a positive cash flow of $400 per month. The family would like to pursue an FHA retention option. They are seven months behind on the mortgage and their debt-to-income ratio is 29%. Which option is best for this situation? - ANSWER Special Forbearance Which aspect of a loan may a client be able to modify when seeking a loan modification due to a financial hardship because of a divorce? - ANSWER Loan Term What information is needed to counsel every client through the loss mitigation process? - ANSWER Type of mortgage Why is it important to include a 4506-T form when submitting a loss mitigation package? - ANSWER Because it authorizes the servicer to obtain the client's tax returns Which retention option would most likely offer a principal reduction? - ANSWER Loan Modification A client who is not behind on the mortgage was recently informed of a reduction of income for two months by the client's employer. The client has an FHA loan and would like to take action as soon as possible to avoid a mortgage delinquency. Which FHA Loss Mitigation option is likely best for this client? - ANSWER Informal/Formal Forbearance What loss mitigation option may allow a borrower an FHA Partial Claim? - ANSWER FHA-HAMP Loan Modification Which type of organization making an unsolicited offer to avoid foreclosure could indicate a scam? - ANSWER A company that offers "government-approved" loan modifications