HUD HOUSING COUNSELING CERTIFICATION
EXAM SCRIPT 2026 QUESTIONS WITH FULL
CORRECT ANSWERS
◉ Risk of second mortgage. Answer: In default, the 1st mortgage
takes priority for any possible repayment recuperated through
foreclosure
= risk for lenders= interest
◉ Project-Based Voucher Program. Answer: PHAS allocate 20% of
its housing choice vouchers for project-based vouchers attached to
specific housing units
-PHAS contract property owners + subsidize units-owners units
towards affordable housing
◉ Character. Answer: Credit history
Employment history
Housing stability
Determine the likeliness of repaying debt
◉ Federal Housing choice voucher program (Section 8). Answer:
Federal government's major program for assisting very low income
,families, the elderly, + the disable to afford decent, safe, + sanitary
housing in the private market
-distributed by PHA'S
-Free to choose housing that meets requirements
◉ Public Housing Agencies. Answer: A state, country, municipality,
or other government agency that develops or operates lows-incomes
housing
Receive funding from HUD for Program Administration
◉ Fair Market Rent (FMR). Answer: -Determination of the monthly
rent of a rental property, calculated by HUD
-Factored by geography + unit size, it sets payment standards for
public housing programs
◉ Front end Ratio. Answer: Rate that calculates a borrower's
housing-related obligations as a percentage of gross monthly income
Frequently used by lenders to qualify borrowers for a mortgage
◉ Drawbacks of Renting. Answer: -Cannot build equity
-Have limited control over
-Decorating + Major Changes
-Forfeit the opportunity for tax benefits
,◉ Benefits of Renting. Answer: -Repair, Maintenance, Yard work,
etc.done by landlord
-Property taxes paid by landlord
-More flexibility to more
◉ Default. Answer: Inability to make timely payments on mortgage
When a payments has not been made after 60-90 days
◉ Foreclosure. Answer: Legal process in which mortgaged property
is sold to pay the loan of the defaulting borrower
-Laws are based on statutes of each state
◉ Loan-to-Value Ratio. Answer: Percentage calculated by dividing
the amount of the outstanding loan amount by the sales price or
appraised value of the home
◉ Responsibilities of home ownership. Answer: -Make monthly
mortgage payments
-Up hold standards of homeowners assoc. or community
-Carry out home repair / maintenance
◉ Government issues Mortgage Loans. Answer: -FHA
, -FV
-USDA
◉ FHA. Answer: Federal Housing Administration
-Provides Mortgage insurance on loans made by private FHA lenders
-Good for clients who
-Have invited funds for down payments
-May not quality for conventional due to flawed credit, bankruptcy,
DTI ratio
-Credit Score as low as 580
◉ Back end ratio formula. Answer: = Total monthly debt expenses
Gross monthly income
Conventional-36% limit
FHA or Energy Efficiency-
43% 45%
Renting - 36%
◉ Requirements for loan approval for self employed. Answer: -
Period of self employment
-2+ years
EXAM SCRIPT 2026 QUESTIONS WITH FULL
CORRECT ANSWERS
◉ Risk of second mortgage. Answer: In default, the 1st mortgage
takes priority for any possible repayment recuperated through
foreclosure
= risk for lenders= interest
◉ Project-Based Voucher Program. Answer: PHAS allocate 20% of
its housing choice vouchers for project-based vouchers attached to
specific housing units
-PHAS contract property owners + subsidize units-owners units
towards affordable housing
◉ Character. Answer: Credit history
Employment history
Housing stability
Determine the likeliness of repaying debt
◉ Federal Housing choice voucher program (Section 8). Answer:
Federal government's major program for assisting very low income
,families, the elderly, + the disable to afford decent, safe, + sanitary
housing in the private market
-distributed by PHA'S
-Free to choose housing that meets requirements
◉ Public Housing Agencies. Answer: A state, country, municipality,
or other government agency that develops or operates lows-incomes
housing
Receive funding from HUD for Program Administration
◉ Fair Market Rent (FMR). Answer: -Determination of the monthly
rent of a rental property, calculated by HUD
-Factored by geography + unit size, it sets payment standards for
public housing programs
◉ Front end Ratio. Answer: Rate that calculates a borrower's
housing-related obligations as a percentage of gross monthly income
Frequently used by lenders to qualify borrowers for a mortgage
◉ Drawbacks of Renting. Answer: -Cannot build equity
-Have limited control over
-Decorating + Major Changes
-Forfeit the opportunity for tax benefits
,◉ Benefits of Renting. Answer: -Repair, Maintenance, Yard work,
etc.done by landlord
-Property taxes paid by landlord
-More flexibility to more
◉ Default. Answer: Inability to make timely payments on mortgage
When a payments has not been made after 60-90 days
◉ Foreclosure. Answer: Legal process in which mortgaged property
is sold to pay the loan of the defaulting borrower
-Laws are based on statutes of each state
◉ Loan-to-Value Ratio. Answer: Percentage calculated by dividing
the amount of the outstanding loan amount by the sales price or
appraised value of the home
◉ Responsibilities of home ownership. Answer: -Make monthly
mortgage payments
-Up hold standards of homeowners assoc. or community
-Carry out home repair / maintenance
◉ Government issues Mortgage Loans. Answer: -FHA
, -FV
-USDA
◉ FHA. Answer: Federal Housing Administration
-Provides Mortgage insurance on loans made by private FHA lenders
-Good for clients who
-Have invited funds for down payments
-May not quality for conventional due to flawed credit, bankruptcy,
DTI ratio
-Credit Score as low as 580
◉ Back end ratio formula. Answer: = Total monthly debt expenses
Gross monthly income
Conventional-36% limit
FHA or Energy Efficiency-
43% 45%
Renting - 36%
◉ Requirements for loan approval for self employed. Answer: -
Period of self employment
-2+ years
