HUD Housing Counselor Certification Practice Questions with Correct Answers

What is the maximum percent of area median income allowable for a household to qualify for a Housing Choice Voucher? Correct Answer 50% Which is the maximum recommended housing ratio for renting an apartment? Correct Answer 30% Eligibility requirements for down-payment assistance programs include which factors? Correct 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? Correct 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? Correct 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? Correct Answer Inappropriate Who is responsible for educating home-buyers about their rights? Correct 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? Correct Answer A 30-day period What are the responsibilities of a home inspector? Correct 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? Correct Answer To compare loan estimates Which is the best advice that a housing counselor can give the client to protect against identity theft? Correct 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? Correct 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? Correct Answer $3000 to $4000 Is Application Fee an upfront cost of clients who are considering renting or buying a property? Correct 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? Correct 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? Correct 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? Correct Answer 43% Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage loan? Correct Answer 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)? Correct Answer 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)? Correct Answer $1,292 On which factor is a borrower's annual mortgage insurance premium (MIP) based? Correct Answer 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? Correct Answer $2,030 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