HUD Certification questions with
complete solutions A+ graded
Pay stub - correct answer ✔✔Which document is most important when working with a client to
develop an initial budget as part of a Client Action Plan?
Pay stub
Retirement plan statement
List of assets
Current lease
Find a second job - correct answer ✔✔A client would like purchase a home within one year. The
client is motivated to increase household income as a way to save for a down payment and
qualify for a loan. Which is the best solution for the client to reach this goal?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service
The number of accounts in collection status - correct answer ✔✔A credit report may contain
which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
,Criminal record
File a dispute with the appropriate credit reporting agency. - correct answer ✔✔A credit report
contains inaccurate information. Which action item should the counselor include in the Client
Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the responsible party.
-Include a personal consumer statement on the credit report.
-File a dispute with the appropriate credit reporting agency.
It decreases credit utilization, causing a positive impact on the credit score. - correct answer
✔✔Six months ago a client left a job as a reporter to start a business in the retail industry. To
prepare to buy a house, the client closed credit card accounts and has been using savings to pay
down credit card debt and collections. The client has not been able to save much for a down
payment with all the debt payments but knows about an affordable home-ownership program
that only requires a 1% down payment with an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a positive impact on the credit score.
-It decreases credit utilization, causing a positive impact on the credit score.
Pay delinquent accounts - correct answer ✔✔Which action would a client take to improve a
credit score?
-Request to expunge public records
,-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts
Fair Credit Billing Act - correct answer ✔✔A client does not receive a written monthly statement
from the credit card company. Which credit law could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act
"I am unable to determine whether the loan is predatory, but I suggest you shop around with
other lending sources." - correct answer ✔✔A client shopping for a mortgage loan presents a
housing counselor with an offer from a local mortgage lender. The interest rate on the offer is
7.5% for a 30-year fixed rate mortgage with a 20% down payment required. The counselor
reviews the client file and determines the client's credit score is 725 and the client's total debt-
to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal predatory lending. How
should the housing counselor respond?
-"You have been a victim of predatory lending and should file a report with the Consumer
Finance Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you to any particular loan
originator."
-"I am unable to determine whether the loan is predatory, but I suggest you shop around with
other lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan."
, File an identity theft report. - correct answer ✔✔Which action should a counselor recommend a
client take first after discovering identity theft?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection.
When weighing housing options - correct answer ✔✔In which situation would a client's
responsibilities, recurring costs, and upfront costs be evaluated?
-When considering closing costs
-When choosing a loan officer
-When weighing housing options
-When applying for a loan modification
$728 - correct answer ✔✔A client works 40 hours a week making $15 an hour. What is the
highest monthly mortgage the client can afford based on income if the client secures a
conventional loan?
-$728
-$806
-$936
-$1,118
USDA - correct answer ✔✔Which type of government insured loan was created for financing
homes in rural areas?
complete solutions A+ graded
Pay stub - correct answer ✔✔Which document is most important when working with a client to
develop an initial budget as part of a Client Action Plan?
Pay stub
Retirement plan statement
List of assets
Current lease
Find a second job - correct answer ✔✔A client would like purchase a home within one year. The
client is motivated to increase household income as a way to save for a down payment and
qualify for a loan. Which is the best solution for the client to reach this goal?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service
The number of accounts in collection status - correct answer ✔✔A credit report may contain
which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
,Criminal record
File a dispute with the appropriate credit reporting agency. - correct answer ✔✔A credit report
contains inaccurate information. Which action item should the counselor include in the Client
Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the responsible party.
-Include a personal consumer statement on the credit report.
-File a dispute with the appropriate credit reporting agency.
It decreases credit utilization, causing a positive impact on the credit score. - correct answer
✔✔Six months ago a client left a job as a reporter to start a business in the retail industry. To
prepare to buy a house, the client closed credit card accounts and has been using savings to pay
down credit card debt and collections. The client has not been able to save much for a down
payment with all the debt payments but knows about an affordable home-ownership program
that only requires a 1% down payment with an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a positive impact on the credit score.
-It decreases credit utilization, causing a positive impact on the credit score.
Pay delinquent accounts - correct answer ✔✔Which action would a client take to improve a
credit score?
-Request to expunge public records
,-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts
Fair Credit Billing Act - correct answer ✔✔A client does not receive a written monthly statement
from the credit card company. Which credit law could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act
"I am unable to determine whether the loan is predatory, but I suggest you shop around with
other lending sources." - correct answer ✔✔A client shopping for a mortgage loan presents a
housing counselor with an offer from a local mortgage lender. The interest rate on the offer is
7.5% for a 30-year fixed rate mortgage with a 20% down payment required. The counselor
reviews the client file and determines the client's credit score is 725 and the client's total debt-
to-income ratio is 20%.
The client asks the housing counselor if the offer is a case of illegal predatory lending. How
should the housing counselor respond?
-"You have been a victim of predatory lending and should file a report with the Consumer
Finance Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you to any particular loan
originator."
-"I am unable to determine whether the loan is predatory, but I suggest you shop around with
other lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan."
, File an identity theft report. - correct answer ✔✔Which action should a counselor recommend a
client take first after discovering identity theft?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection.
When weighing housing options - correct answer ✔✔In which situation would a client's
responsibilities, recurring costs, and upfront costs be evaluated?
-When considering closing costs
-When choosing a loan officer
-When weighing housing options
-When applying for a loan modification
$728 - correct answer ✔✔A client works 40 hours a week making $15 an hour. What is the
highest monthly mortgage the client can afford based on income if the client secures a
conventional loan?
-$728
-$806
-$936
-$1,118
USDA - correct answer ✔✔Which type of government insured loan was created for financing
homes in rural areas?
