HUD HOUSING COUNSELOR
CERTIFICATION PRACTICE EXAM
QUESTIONS AND ANSWERS 100% PASS
2026/2027
What is the maximum percent of area median income allowable for a household to qualify for a
Housing Choice Voucher? - ANS 50%
Which is the maximum recommended housing ratio for renting an apartment? - ANS 30%
Eligibility requirements for down-payment assistance programs include which factors? -
ANS 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? - ANS 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? - ANS 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?
- ANS Inappropriate
2026/2027 ALLRIGHTS RESERVED
1
,Who is responsible for educating home-buyers about their rights? - ANS 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? - ANS A 30-day
period
What are the responsibilities of a home inspector? - ANS 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? - ANS To compare loan estimates
Which is the best advice that a housing counselor can give the client to protect against identity
theft? - ANS 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? - ANS 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? - ANS $3000 to $4000
Is Application Fee an upfront cost of clients who are considering renting or buying a property? -
ANS 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? - ANS Home-
ownership
2026/2027 ALLRIGHTS RESERVED
2
,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? - ANS $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? - ANS 43%
Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage
loan? - ANS 45%
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)? - ANS 33%
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)? - ANS $1,292
On which factor is a borrower's annual mortgage insurance premium (MIP) based? -
ANS Current principal balance
NOTE: The annual mortgage insurance premium (MIP) is based on the unpaid principal balance
of the loan. The loan-to-value ratio is used to determine when private mortgage insurance (PMI)
can be dropped from the loan. Credit scores do not affect MIP but might affect PMI.
Which is the upfront mortgage insurance premium (UFMIP) if the client purchases a home with
an FHA loan amount of $116,000? - ANS $2,030
2026/2027 ALLRIGHTS RESERVED
3
, The client only tracks bill payments. Which should the housing counselor recommend to help
the client begin
planning for a home purchase?
A- Continue to track bill payments only
B- Track income only
C- Track all income and expenses
D- Track savings deposits and expenses - ANS C- Track all income and expenses
How should a client apply for the Housing Choice Voucher Program? - ANS Contact the local
Public Housing Authority
Which website provides information on programs to assist home-buyers with down payment
assistance? - ANS HUD.gov
Based on the client's income of $56,400 per year of, savings of 12,000 toward a down payment,
and credit score of 700, which mortgage option is likely best for her; Conventional loan, FHA
loan, USDA Rural Development loan, or Subprime loan? - ANS Conventional loan
This client is denied a loan to purchase a home because she has not lived in the country for at
least ten years. Which Act is this adverse action violating, and where should the client report
this action to? - ANS Report the action to the Federal Trade Commission, it is a violation of
the Equal Credit Opportunity Act
If the client submits a loan application, which document should she receive within three
business days? - ANS Loan Estimate
What is a pre-approval from a lender? - ANS When the lender commits to lend a fixed
amount based on a review of the client's application.
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
2026/2027 ALLRIGHTS RESERVED
4
CERTIFICATION PRACTICE EXAM
QUESTIONS AND ANSWERS 100% PASS
2026/2027
What is the maximum percent of area median income allowable for a household to qualify for a
Housing Choice Voucher? - ANS 50%
Which is the maximum recommended housing ratio for renting an apartment? - ANS 30%
Eligibility requirements for down-payment assistance programs include which factors? -
ANS 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? - ANS 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? - ANS 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?
- ANS Inappropriate
2026/2027 ALLRIGHTS RESERVED
1
,Who is responsible for educating home-buyers about their rights? - ANS 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? - ANS A 30-day
period
What are the responsibilities of a home inspector? - ANS 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? - ANS To compare loan estimates
Which is the best advice that a housing counselor can give the client to protect against identity
theft? - ANS 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? - ANS 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? - ANS $3000 to $4000
Is Application Fee an upfront cost of clients who are considering renting or buying a property? -
ANS 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? - ANS Home-
ownership
2026/2027 ALLRIGHTS RESERVED
2
,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? - ANS $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? - ANS 43%
Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage
loan? - ANS 45%
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)? - ANS 33%
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)? - ANS $1,292
On which factor is a borrower's annual mortgage insurance premium (MIP) based? -
ANS Current principal balance
NOTE: The annual mortgage insurance premium (MIP) is based on the unpaid principal balance
of the loan. The loan-to-value ratio is used to determine when private mortgage insurance (PMI)
can be dropped from the loan. Credit scores do not affect MIP but might affect PMI.
Which is the upfront mortgage insurance premium (UFMIP) if the client purchases a home with
an FHA loan amount of $116,000? - ANS $2,030
2026/2027 ALLRIGHTS RESERVED
3
, The client only tracks bill payments. Which should the housing counselor recommend to help
the client begin
planning for a home purchase?
A- Continue to track bill payments only
B- Track income only
C- Track all income and expenses
D- Track savings deposits and expenses - ANS C- Track all income and expenses
How should a client apply for the Housing Choice Voucher Program? - ANS Contact the local
Public Housing Authority
Which website provides information on programs to assist home-buyers with down payment
assistance? - ANS HUD.gov
Based on the client's income of $56,400 per year of, savings of 12,000 toward a down payment,
and credit score of 700, which mortgage option is likely best for her; Conventional loan, FHA
loan, USDA Rural Development loan, or Subprime loan? - ANS Conventional loan
This client is denied a loan to purchase a home because she has not lived in the country for at
least ten years. Which Act is this adverse action violating, and where should the client report
this action to? - ANS Report the action to the Federal Trade Commission, it is a violation of
the Equal Credit Opportunity Act
If the client submits a loan application, which document should she receive within three
business days? - ANS Loan Estimate
What is a pre-approval from a lender? - ANS When the lender commits to lend a fixed
amount based on a review of the client's application.
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
2026/2027 ALLRIGHTS RESERVED
4
