HUD HOUSING COUNSELING CERTIFICATION
PRACTICE EXAM 2026 QUESTIONS WITH
VERIFIED CORRECT ANSWERS
◉ Fair and Accurate Credit Transactions Act (FACTA). Answer: -
Right to a free annual credit report
- Right to place a fraud alert for 90 days
- Credit card numbers must be truncated
◉ Fair Credit Billing Act (FCBA). Answer: - Dispute errors on
account (within 60 days)
- Must be billed in timely manner (at least 14 days before payment is
due)
◉ Items to include when tracking income. Answer: - regular salary
- temporary jobs
- unemployment compensation
- public assistance
◉ How to calculate income if the amounts varies month to month.
Answer: Average it out over 12 months
,◉ Items NOT to include when calculating income. Answer: - Pre-tax
payroll deductions
- Credit score
◉ Documents to use to calculate income. Answer: - paychecks, direct
deposit slips
- if self-employed, income and expense sheet
- additional income checks or cash
- Government benefits letters (SSI, unemployment, etc)
◉ Items to include when tracking expenses. Answer: - all bills
- all fixed monthly expenses
- all cash expenses
- seasonal or annual expenses (holidays, gifts, vacations)
◉ Documents to use to track expenses. Answer: - Utility, insurance
and other bills
- Bank statements
- Credit card statements
- Records about car registration, school supplies etc.
◉ All of the following are reasons why it is important for a client to
track income and expenses before finalizing a budget, except:
,-It helps show clients that they actually spend less on some expenses
than they think.
- It helps identify spending habits.
- It helps show clients that their spending and expenses are out of
control.
- It helps define realistic and attainable goals and timelines.. Answer:
It helps show clients that their spending and expenses are out of
control.
◉ What are the secondary steps to help clients develop a realistic
budget?. Answer: - Examine content in the budget worksheet
- Ask client what she has discovered about income and spending
habits
- Ask client if she thinks her goals are achievable
- Coach client on strategies for defining needs over wants
- Walk through strategies for adjusting goals and budget
- Develop a client action plan that includes client actions/tasks and
time frames
◉ Strategies for increasing income. Answer: 1. Find a second job
2. Work overtime
3. Negotiate higher salary/wage
4. Sell assets (e.g., car)
, 5. Hold a yard sale
6. Teach a skill/craft/activity
7. Sell a craft
8. Charge rent (if adult dependents in home)
9. Evaluate tax withholdings
◉ Strategies for decreasing expenses. Answer: 1. Prioritize needs vs.
wants
2. Reduce or eliminate "wants" (e.g., clothes, gym)
3. Cancel or downgrade services (e.g., cable, telephone
4. Limit miscellaneous spending
5. Stick to a shopping list
6. Reduce debt (pay off a loan or credit card)
7. Move to more affordable housing
8. Change insurance coverage for lower premiums, but don't cancel
◉ Which of the following is a "want" and not a "need"?
Health Care Premium
Car Insurance
Gym Membership
Rent. Answer: Gym Membership
PRACTICE EXAM 2026 QUESTIONS WITH
VERIFIED CORRECT ANSWERS
◉ Fair and Accurate Credit Transactions Act (FACTA). Answer: -
Right to a free annual credit report
- Right to place a fraud alert for 90 days
- Credit card numbers must be truncated
◉ Fair Credit Billing Act (FCBA). Answer: - Dispute errors on
account (within 60 days)
- Must be billed in timely manner (at least 14 days before payment is
due)
◉ Items to include when tracking income. Answer: - regular salary
- temporary jobs
- unemployment compensation
- public assistance
◉ How to calculate income if the amounts varies month to month.
Answer: Average it out over 12 months
,◉ Items NOT to include when calculating income. Answer: - Pre-tax
payroll deductions
- Credit score
◉ Documents to use to calculate income. Answer: - paychecks, direct
deposit slips
- if self-employed, income and expense sheet
- additional income checks or cash
- Government benefits letters (SSI, unemployment, etc)
◉ Items to include when tracking expenses. Answer: - all bills
- all fixed monthly expenses
- all cash expenses
- seasonal or annual expenses (holidays, gifts, vacations)
◉ Documents to use to track expenses. Answer: - Utility, insurance
and other bills
- Bank statements
- Credit card statements
- Records about car registration, school supplies etc.
◉ All of the following are reasons why it is important for a client to
track income and expenses before finalizing a budget, except:
,-It helps show clients that they actually spend less on some expenses
than they think.
- It helps identify spending habits.
- It helps show clients that their spending and expenses are out of
control.
- It helps define realistic and attainable goals and timelines.. Answer:
It helps show clients that their spending and expenses are out of
control.
◉ What are the secondary steps to help clients develop a realistic
budget?. Answer: - Examine content in the budget worksheet
- Ask client what she has discovered about income and spending
habits
- Ask client if she thinks her goals are achievable
- Coach client on strategies for defining needs over wants
- Walk through strategies for adjusting goals and budget
- Develop a client action plan that includes client actions/tasks and
time frames
◉ Strategies for increasing income. Answer: 1. Find a second job
2. Work overtime
3. Negotiate higher salary/wage
4. Sell assets (e.g., car)
, 5. Hold a yard sale
6. Teach a skill/craft/activity
7. Sell a craft
8. Charge rent (if adult dependents in home)
9. Evaluate tax withholdings
◉ Strategies for decreasing expenses. Answer: 1. Prioritize needs vs.
wants
2. Reduce or eliminate "wants" (e.g., clothes, gym)
3. Cancel or downgrade services (e.g., cable, telephone
4. Limit miscellaneous spending
5. Stick to a shopping list
6. Reduce debt (pay off a loan or credit card)
7. Move to more affordable housing
8. Change insurance coverage for lower premiums, but don't cancel
◉ Which of the following is a "want" and not a "need"?
Health Care Premium
Car Insurance
Gym Membership
Rent. Answer: Gym Membership
