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HUD CERTIFICATION EXAM PREP 130 Questions And Correct Answers
(Verified Answers) 2026/2027 Q&A | Instant Download Pdf
Which document is most important when working with a client to develop an initial budget as part of
a Client Action Plan?
Pay stub
Retirement plan statement
List of assets
Current lease - correct answer -Pay stub
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?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service - correct answer -Find a second job
A credit report may contain which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
Criminal record - correct answer -The number of accounts in collection status
A credit report contains inaccurate information. Which action item should the counselor include in the
Client Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the responsible party.
-Include a personal consumer statement on the credit report.
,-File a dispute with the appropriate credit reporting agency. - correct answer -File a dispute with the
appropriate 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 home-ownership program that only requires a 1% down
payment with an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a positive impact on the credit score.
-It decreases credit utilization, causing a positive impact on the credit score. - correct answer -It
decreases credit utilization, causing a positive impact on the credit score.
Which action would a client take to improve a credit score?
-Request to expunge public records
-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts - correct answer -Pay delinquent accounts
A client does not receive a written monthly statement from the credit card company. Which credit law
could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act - correct answer -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%.
, The client asks the housing counselor if the offer is a case of illegal predatory lending. How should the
housing counselor respond?
-"You have been a victim of predatory lending and should file a report with the Consumer Finance
Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you to any particular loan
originator."
-"I am unable to determine whether the loan is predatory, but I suggest you shop around with other
lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan." - correct answer -"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?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection. - correct answer -File an identity theft report.
In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated?
-When considering closing costs
-When choosing a loan officer
-When weighing housing options
-When applying for a loan modification - correct 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?
-$728
-$806
-$936
-$1,118 - correct answer -$728
HUD CERTIFICATION EXAM PREP 130 Questions And Correct Answers
(Verified Answers) 2026/2027 Q&A | Instant Download Pdf
Which document is most important when working with a client to develop an initial budget as part of
a Client Action Plan?
Pay stub
Retirement plan statement
List of assets
Current lease - correct answer -Pay stub
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?
Find a second job
Borrow from retirement fund
Sell major assets
Find a temporary job through a staffing service - correct answer -Find a second job
A credit report may contain which information?
The number of accounts in collection status
A history of payments on an electric bill
Income history
Criminal record - correct answer -The number of accounts in collection status
A credit report contains inaccurate information. Which action item should the counselor include in the
Client Action Plan?
-Attach a letter to mortgage applications explaining the inaccuracies.
-Investigate the reasons why the inaccuracies occurred to determine the responsible party.
-Include a personal consumer statement on the credit report.
,-File a dispute with the appropriate credit reporting agency. - correct answer -File a dispute with the
appropriate 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 home-ownership program that only requires a 1% down
payment with an FHA loan.
What might result from the client closing the credit card accounts?
-It decreases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a negative impact on the credit score.
-It increases credit utilization, causing a positive impact on the credit score.
-It decreases credit utilization, causing a positive impact on the credit score. - correct answer -It
decreases credit utilization, causing a positive impact on the credit score.
Which action would a client take to improve a credit score?
-Request to expunge public records
-Apply for new credit cards to increase credit
-Cancel all credit cards
-Pay delinquent accounts - correct answer -Pay delinquent accounts
A client does not receive a written monthly statement from the credit card company. Which credit law
could this omission violate?
-Fair Credit Billing Act
-Fair Credit Reporting Act
-Fair Housing Act
-Fair and Accurate Credit Transactions Act - correct answer -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%.
, The client asks the housing counselor if the offer is a case of illegal predatory lending. How should the
housing counselor respond?
-"You have been a victim of predatory lending and should file a report with the Consumer Finance
Protection Bureau (CFPB)."
-"The loan seems reasonable. You might do better, but I cannot steer you to any particular loan
originator."
-"I am unable to determine whether the loan is predatory, but I suggest you shop around with other
lending sources."
-"I cannot offer legal advice, but I would not proceed with the loan." - correct answer -"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?
-File for a name change.
-Apply for a new Social Security number.
-File an identity theft report.
-Purchase identity theft protection. - correct answer -File an identity theft report.
In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated?
-When considering closing costs
-When choosing a loan officer
-When weighing housing options
-When applying for a loan modification - correct 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?
-$728
-$806
-$936
-$1,118 - correct answer -$728
