2026-2027 Latest HUD Certification Exam
Prep Test Bank/ HUD Exam - Housing
Counselor Certification Exam Test Bank
with 300+ Questions and Correct Answers
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
B- Track income only
C- Track all income and expenses
D- Track savings deposits and expenses - ANSWER-C- Track all income and
expenses
How should a client apply for the Housing Choice Voucher Program? -
ANSWER-Contact the local Public Housing Authority
Which website provides information on programs to assist home-buyers with down
payment assistance? - ANSWER-HUD.gov
Which is the best recommendation the housing counselor should give this client to
help improve her credit score?
A- Set up automatic credit card and loan payments to ensure on time payment
B- Apply for a loan to consolidate the credit card and auto loan balances
1
,C- Apply for a credit card with a lower interest rate and transfer the balance of the
current card
D- Pay more than the minimum payment each month to reduce the credit card
balance - ANSWER-D- Pay more than the minimum payment each month to
reduce the credit card balance
Which factor would most likely impact the client's housing affordability in the
future?
A- A reduction in income when the survivor benefit runs out when children turn 18
B- The need for a second car when the children start to drive
C- Selecting a 30-year fixed rate mortgage versus a 15-year fixed rate mortgage
D- The cost of home repairs and maintenance - ANSWER-A- A reduction in
income when the survivor benefit runs out when children turn 18
The client currently pays $2,050 in rent, though her mortgage payment could be
higher. Which is the most effective strategy to be able to manage a higher
payment?
A- Withdraw retirement account funds to pay down car and credit card balances
B- Delay home purchase until the car loan is paid off
C- Consolidate car loan and credit card balances
D- Utilize savings to pay the mortgage in the future - ANSWER-B- Delay home
purchase until the car loan is paid off
Based on the client's income of $56,400 per year of, savings of 12,000 toward a
down payment, and credit score of 700, which mortgage option is likely best for
her; Conventional loan, FHA loan, USDA Rural Development loan, or Subprime
loan? - ANSWER-Conventional loan
2
,This client is denied a loan to purchase a home because she has not lived in the
country for at least ten years. Which Act is this adverse action violating, and where
should the client report this action to? - ANSWER-Report the action to the Federal
Trade Commission, it is a violation of the Equal Credit Opportunity Act
If the client submits a loan application, which document should she receive within
three business days? - ANSWER-Loan Estimate
What is a pre-approval from a lender? - ANSWER-When the lender commits to
lend a fixed amount based on a review of the client's application.
A client has been a paralegal for five years and earns $56,400 per year. She has
been working part-time at an ice cream parlor for the past few summers to save for
her first home. Now that she has saved $12,000 toward a down payment, she no
longer needs to work a second job. In the next three months, the client would like
to buy a single-family home near a good school for less than $150,000.
Does this client meet a lender's expectation for continued employment? -
ANSWER-Yes, because the client has been at her job over two years
In reviewing a loan estimate, the housing counselor finds fees for services that
seem unnecessary. What is the most likely explanation for these fees? Choose one:
A- Predatory lending practices
B- Subprime mortgage terms
C- Regional lending considerations
D- Variation in lending practices - ANSWER-A- Predatory lending practices
3
, The client thinks her cost of living is going to be the same because her mortgage
payment and her rental payment are comparable. What are three recurring costs
associated with home-ownership that are not part of home rental?
A- Homeowners insurance, property taxes, home repairs
B- Property taxes, renters insurance, utility bill
C- Utility bill, car insurance, renters insurance
D- Car insurance, property taxes, cable bill - ANSWER-Homeowners insurance,
property taxes, home repairs
Which additional information should the housing counselor request from the client
to determine her readiness to purchase a home? Choose One:
A- Planned family size
B- Current lease
C- Pre-qualification letter
D- Expenses - ANSWER-D- Expenses
A client has been a paralegal for five years and earns $56,400 per year. She has
been working part-time at an ice cream parlor for the past few summers to save for
her first home. Now that she has saved $12,000 toward a down payment, she no
longer needs to work a second job. In the next three months, the client would like
to buy a single-family home near a good school for less than $150,000.
What is this client's maximum mortgage payment if the lender's housing ratio is 28
percent (round to the nearest
dollar)? - ANSWER-$1,316
4
Prep Test Bank/ HUD Exam - Housing
Counselor Certification Exam Test Bank
with 300+ Questions and Correct Answers
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
B- Track income only
C- Track all income and expenses
D- Track savings deposits and expenses - ANSWER-C- Track all income and
expenses
How should a client apply for the Housing Choice Voucher Program? -
ANSWER-Contact the local Public Housing Authority
Which website provides information on programs to assist home-buyers with down
payment assistance? - ANSWER-HUD.gov
Which is the best recommendation the housing counselor should give this client to
help improve her credit score?
A- Set up automatic credit card and loan payments to ensure on time payment
B- Apply for a loan to consolidate the credit card and auto loan balances
1
,C- Apply for a credit card with a lower interest rate and transfer the balance of the
current card
D- Pay more than the minimum payment each month to reduce the credit card
balance - ANSWER-D- Pay more than the minimum payment each month to
reduce the credit card balance
Which factor would most likely impact the client's housing affordability in the
future?
A- A reduction in income when the survivor benefit runs out when children turn 18
B- The need for a second car when the children start to drive
C- Selecting a 30-year fixed rate mortgage versus a 15-year fixed rate mortgage
D- The cost of home repairs and maintenance - ANSWER-A- A reduction in
income when the survivor benefit runs out when children turn 18
The client currently pays $2,050 in rent, though her mortgage payment could be
higher. Which is the most effective strategy to be able to manage a higher
payment?
A- Withdraw retirement account funds to pay down car and credit card balances
B- Delay home purchase until the car loan is paid off
C- Consolidate car loan and credit card balances
D- Utilize savings to pay the mortgage in the future - ANSWER-B- Delay home
purchase until the car loan is paid off
Based on the client's income of $56,400 per year of, savings of 12,000 toward a
down payment, and credit score of 700, which mortgage option is likely best for
her; Conventional loan, FHA loan, USDA Rural Development loan, or Subprime
loan? - ANSWER-Conventional loan
2
,This client is denied a loan to purchase a home because she has not lived in the
country for at least ten years. Which Act is this adverse action violating, and where
should the client report this action to? - ANSWER-Report the action to the Federal
Trade Commission, it is a violation of the Equal Credit Opportunity Act
If the client submits a loan application, which document should she receive within
three business days? - ANSWER-Loan Estimate
What is a pre-approval from a lender? - ANSWER-When the lender commits to
lend a fixed amount based on a review of the client's application.
A client has been a paralegal for five years and earns $56,400 per year. She has
been working part-time at an ice cream parlor for the past few summers to save for
her first home. Now that she has saved $12,000 toward a down payment, she no
longer needs to work a second job. In the next three months, the client would like
to buy a single-family home near a good school for less than $150,000.
Does this client meet a lender's expectation for continued employment? -
ANSWER-Yes, because the client has been at her job over two years
In reviewing a loan estimate, the housing counselor finds fees for services that
seem unnecessary. What is the most likely explanation for these fees? Choose one:
A- Predatory lending practices
B- Subprime mortgage terms
C- Regional lending considerations
D- Variation in lending practices - ANSWER-A- Predatory lending practices
3
, The client thinks her cost of living is going to be the same because her mortgage
payment and her rental payment are comparable. What are three recurring costs
associated with home-ownership that are not part of home rental?
A- Homeowners insurance, property taxes, home repairs
B- Property taxes, renters insurance, utility bill
C- Utility bill, car insurance, renters insurance
D- Car insurance, property taxes, cable bill - ANSWER-Homeowners insurance,
property taxes, home repairs
Which additional information should the housing counselor request from the client
to determine her readiness to purchase a home? Choose One:
A- Planned family size
B- Current lease
C- Pre-qualification letter
D- Expenses - ANSWER-D- Expenses
A client has been a paralegal for five years and earns $56,400 per year. She has
been working part-time at an ice cream parlor for the past few summers to save for
her first home. Now that she has saved $12,000 toward a down payment, she no
longer needs to work a second job. In the next three months, the client would like
to buy a single-family home near a good school for less than $150,000.
What is this client's maximum mortgage payment if the lender's housing ratio is 28
percent (round to the nearest
dollar)? - ANSWER-$1,316
4
