HUD PRACTICE TEST EXAM
QUESTIONS AND ANSWERS GRADED A+
2026
Which document is most important when working with a client to develop an initial budget as
part of a Client Action Plan? - ANS Pay Stub
A client would like to 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? - ANS Find a second job
A credit report may contain which information? - ANS The number of accounts in collection
status
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
@COPYRIGHT 2026/2027 ALLRIGHTS RESERVED 1
, loan. What might result from the client closing the credit card
accounts? - ANS It increases credit utilization, causing a negative impact on the credit
score.
Which action would a client take to improve a credit score? - ANS Pay delinquent accounts
A client does not receive a written monthly statement from the credit card company. Which
credit law could this omission violate? - ANS Fair Credit Billing Act
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%. - ANS "I am unable to
determine whether the loan is predatory, but I suggest you shop around with other lending
sources."
Which action should a counselor recommend a client take first after discovering identity theft? -
ANS File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront costs be
evaluated? - ANS 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? - ANS $728
Which type of government insured loan was created for financing homes in rural areas? -
ANS USDA
@COPYRIGHT 2026/2027 ALLRIGHTS RESERVED 2
QUESTIONS AND ANSWERS GRADED A+
2026
Which document is most important when working with a client to develop an initial budget as
part of a Client Action Plan? - ANS Pay Stub
A client would like to 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? - ANS Find a second job
A credit report may contain which information? - ANS The number of accounts in collection
status
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
@COPYRIGHT 2026/2027 ALLRIGHTS RESERVED 1
, loan. What might result from the client closing the credit card
accounts? - ANS It increases credit utilization, causing a negative impact on the credit
score.
Which action would a client take to improve a credit score? - ANS Pay delinquent accounts
A client does not receive a written monthly statement from the credit card company. Which
credit law could this omission violate? - ANS Fair Credit Billing Act
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%. - ANS "I am unable to
determine whether the loan is predatory, but I suggest you shop around with other lending
sources."
Which action should a counselor recommend a client take first after discovering identity theft? -
ANS File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront costs be
evaluated? - ANS 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? - ANS $728
Which type of government insured loan was created for financing homes in rural areas? -
ANS USDA
@COPYRIGHT 2026/2027 ALLRIGHTS RESERVED 2
