HUD PRACTICE EXAM 2026 COMPREHENSIVE
EXAM QUESTIONS AND CORRECT ANSWERS
◉ 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? Answer:
◉ A credit report may contain which information? Answer: Income
history
Criminal record
# of accounts in collection status
A history of payments on an elctric bill
◉ A credit report contains inaccurate information. Which action
item should the counselor include in the Client Action Plan? Answer:
FIle a dispute with the appropaite credit reporting agency
◉ 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 homeownership program that only requires a 1% down
payment with an FHA loan.
What might result from the client closing the credit card accounts?
Answer:
◉ Which action would a client take to improve a credit score?
Answer:
◉ A client does not receive a written monthly statement from the
credit card company. Which credit law could this omission violate?
Answer: FCBA
◉ 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?
Answer: I am unable to determine whether the loan is predatory but
i suggest you shop around with other ledning sources
, ◉ Which action should a counselor recommend a client take first
after discovering identity theft? Answer: File an identity theft report
◉ In which situation would a client's responsibilities, recurring
costs, and upfront costs be evaluated? Answer: When weighing
housing options
◉ 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? Answer: Front End Ratio
Formula
Conventional = <28%
◉ Which type of government insured loan was created for financing
homes in rural areas? Answer: USDA
◉ A client keeps having budget problems due to unexpected
expenses. Which financial tool would best assist this client to
prepare for unexpected expenses and avoid increasing credit usage?
Answer: Emergency Fund
◉ A client has a monthly household income of $2,300, monthly debt
payments of $450, and an optimal monthly housing ratio of 32%.
What is the client's optimal monthly housing payment? Answer:
Front End Ratio Formula
EXAM QUESTIONS AND CORRECT ANSWERS
◉ 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? Answer:
◉ A credit report may contain which information? Answer: Income
history
Criminal record
# of accounts in collection status
A history of payments on an elctric bill
◉ A credit report contains inaccurate information. Which action
item should the counselor include in the Client Action Plan? Answer:
FIle a dispute with the appropaite credit reporting agency
◉ 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 homeownership program that only requires a 1% down
payment with an FHA loan.
What might result from the client closing the credit card accounts?
Answer:
◉ Which action would a client take to improve a credit score?
Answer:
◉ A client does not receive a written monthly statement from the
credit card company. Which credit law could this omission violate?
Answer: FCBA
◉ 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?
Answer: I am unable to determine whether the loan is predatory but
i suggest you shop around with other ledning sources
, ◉ Which action should a counselor recommend a client take first
after discovering identity theft? Answer: File an identity theft report
◉ In which situation would a client's responsibilities, recurring
costs, and upfront costs be evaluated? Answer: When weighing
housing options
◉ 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? Answer: Front End Ratio
Formula
Conventional = <28%
◉ Which type of government insured loan was created for financing
homes in rural areas? Answer: USDA
◉ A client keeps having budget problems due to unexpected
expenses. Which financial tool would best assist this client to
prepare for unexpected expenses and avoid increasing credit usage?
Answer: Emergency Fund
◉ A client has a monthly household income of $2,300, monthly debt
payments of $450, and an optimal monthly housing ratio of 32%.
What is the client's optimal monthly housing payment? Answer:
Front End Ratio Formula
