HUD CERTIFICATION EXAM PREP 130 Questions And Correct
Answers (Verified Answers) 2026/2027 Q&A | Instant Download Pdf
What is the maximum percent of area median income allowable for a household to qualify for a Housing
Choice Voucher? - correct answer -50%
Which is the maximum recommended housing ratio for renting an apartment? - correct answer -30%
Eligibility requirements for down-payment assistance programs include which factors? - correct answer
-Income, home-buyer education, purchase price
The client is considering an FHA mortgage. What is the upfront mortgage insurance premium (UFMIP)
for an
FHA mortgage? - correct answer -1.75%
If the client was denied a mortgage loan and the lender told him to come back after his divorce had
been final for three years, what is the best advice for the housing counselor to provide to the client to
report a violation to ECOA? - correct answer -Contact the Federal Trade Commission as the lender's
action might violate the Equal Credit Opportunity Act
A question from a lender on the client's Medical History would be inappropriate or appropriate? -
correct answer -Inappropriate
Who is responsible for educating home-buyers about their rights? - correct answer -Housing Counselor
In order to minimize the impact on the client's credit score, what is the maximum time frame within
which the client should apply for pre-approval from multiple lenders? - correct answer -A 30-day
period
What are the responsibilities of a home inspector? - correct answer -Examine mechanical systems,
Evaluate the condition of a home, Identify items to be repaired or replaced
,Which is the best reason that a housing counselor would suggest that a client speak to three to five
different lenders? - correct answer -To compare loan estimates
Which is the best advice that a housing counselor can give the client to protect against identity theft? -
correct answer -Review credit report at least once per year
The client tells the lender that he is expecting a raise soon. Should the Lender provide a Loan Estimate
(LE) with, or without factoring the raise? - correct answer -Provide a loan estimate without factoring in
the raise
If this client obtains a mortgage of $100,000, typically, how much should he expect to pay for closing
costs? - correct answer -$3000 to $4000
Is Application Fee an upfront cost of clients who are considering renting or buying a property? - correct
answer -Renting
A client wants to customize his home with do-it-yourself projects, this is an indication the client is best
aligned with which housing option; Home-ownership or Renting? - correct answer -Home-ownership
The client's gross monthly income is $4167 and the monthly debts are $435. What is the maximum
mortgage payment (rounded to the nearest dollar) for which this client would qualify using a standard
conventional loan? - correct answer -$1,065
NOTE: The maximum front-end ratio for a standard conventional loan is 28%, and the back-end ratio is
36%. The front-end ratio is calculated as 28% of the client's monthly income of $4,167, which is $1,167.
The back-end ratio is calculated as 36% of the
client's monthly income of $4,167 minus the client's monthly debt of $435, which equals $1,065.
Therefore, the maximum loan payment that the client qualifies for is the lower of the two numbers,
which is $1,065.
Which is the maximum debt-to-income ratio allowable for an FHA loan? - correct answer -43%
,Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage loan? -
correct answer -45%
The client's gross monthly income is $4167 and the monthly debts are $435. With a monthly mortgage
payment of $950, which is the client's debt-to-income ratio (round to the nearest whole percent)? -
correct answer -33%
The client's gross monthly income is $4167 and the monthly debts are $435. If the client seeks an FHA
Energy Efficient Mortgage (EEM) loan, what is the maximum housing payment for which he can qualify
(rounded to the nearest dollar)? - correct answer -$1,292
On which factor is a borrower's annual mortgage insurance premium (MIP) based? - correct answer -
Current principal balance
NOTE: The annual mortgage insurance premium (MIP) is based on the unpaid principal balance of the
loan. The loan-to-value ratio is used to determine when private mortgage insurance (PMI) can be
dropped from the loan. Credit scores do not affect MIP but might affect PMI.
Which is the upfront mortgage insurance premium (UFMIP) if the client purchases a home with an FHA
loan amount of $116,000? - correct answer -$2,030
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 - correct answer -C- Track all income and expenses
How should a client apply for the Housing Choice Voucher Program? - correct answer -Contact the
local Public Housing Authority
, Which website provides information on programs to assist home-buyers with down payment
assistance? - correct answer -HUD.gov
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? - correct answer -Conventional loan
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? -
correct 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? -
correct answer -Loan Estimate
What is a pre-approval from a lender? - correct 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? - correct 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
Answers (Verified Answers) 2026/2027 Q&A | Instant Download Pdf
What is the maximum percent of area median income allowable for a household to qualify for a Housing
Choice Voucher? - correct answer -50%
Which is the maximum recommended housing ratio for renting an apartment? - correct answer -30%
Eligibility requirements for down-payment assistance programs include which factors? - correct answer
-Income, home-buyer education, purchase price
The client is considering an FHA mortgage. What is the upfront mortgage insurance premium (UFMIP)
for an
FHA mortgage? - correct answer -1.75%
If the client was denied a mortgage loan and the lender told him to come back after his divorce had
been final for three years, what is the best advice for the housing counselor to provide to the client to
report a violation to ECOA? - correct answer -Contact the Federal Trade Commission as the lender's
action might violate the Equal Credit Opportunity Act
A question from a lender on the client's Medical History would be inappropriate or appropriate? -
correct answer -Inappropriate
Who is responsible for educating home-buyers about their rights? - correct answer -Housing Counselor
In order to minimize the impact on the client's credit score, what is the maximum time frame within
which the client should apply for pre-approval from multiple lenders? - correct answer -A 30-day
period
What are the responsibilities of a home inspector? - correct answer -Examine mechanical systems,
Evaluate the condition of a home, Identify items to be repaired or replaced
,Which is the best reason that a housing counselor would suggest that a client speak to three to five
different lenders? - correct answer -To compare loan estimates
Which is the best advice that a housing counselor can give the client to protect against identity theft? -
correct answer -Review credit report at least once per year
The client tells the lender that he is expecting a raise soon. Should the Lender provide a Loan Estimate
(LE) with, or without factoring the raise? - correct answer -Provide a loan estimate without factoring in
the raise
If this client obtains a mortgage of $100,000, typically, how much should he expect to pay for closing
costs? - correct answer -$3000 to $4000
Is Application Fee an upfront cost of clients who are considering renting or buying a property? - correct
answer -Renting
A client wants to customize his home with do-it-yourself projects, this is an indication the client is best
aligned with which housing option; Home-ownership or Renting? - correct answer -Home-ownership
The client's gross monthly income is $4167 and the monthly debts are $435. What is the maximum
mortgage payment (rounded to the nearest dollar) for which this client would qualify using a standard
conventional loan? - correct answer -$1,065
NOTE: The maximum front-end ratio for a standard conventional loan is 28%, and the back-end ratio is
36%. The front-end ratio is calculated as 28% of the client's monthly income of $4,167, which is $1,167.
The back-end ratio is calculated as 36% of the
client's monthly income of $4,167 minus the client's monthly debt of $435, which equals $1,065.
Therefore, the maximum loan payment that the client qualifies for is the lower of the two numbers,
which is $1,065.
Which is the maximum debt-to-income ratio allowable for an FHA loan? - correct answer -43%
,Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage loan? -
correct answer -45%
The client's gross monthly income is $4167 and the monthly debts are $435. With a monthly mortgage
payment of $950, which is the client's debt-to-income ratio (round to the nearest whole percent)? -
correct answer -33%
The client's gross monthly income is $4167 and the monthly debts are $435. If the client seeks an FHA
Energy Efficient Mortgage (EEM) loan, what is the maximum housing payment for which he can qualify
(rounded to the nearest dollar)? - correct answer -$1,292
On which factor is a borrower's annual mortgage insurance premium (MIP) based? - correct answer -
Current principal balance
NOTE: The annual mortgage insurance premium (MIP) is based on the unpaid principal balance of the
loan. The loan-to-value ratio is used to determine when private mortgage insurance (PMI) can be
dropped from the loan. Credit scores do not affect MIP but might affect PMI.
Which is the upfront mortgage insurance premium (UFMIP) if the client purchases a home with an FHA
loan amount of $116,000? - correct answer -$2,030
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 - correct answer -C- Track all income and expenses
How should a client apply for the Housing Choice Voucher Program? - correct answer -Contact the
local Public Housing Authority
, Which website provides information on programs to assist home-buyers with down payment
assistance? - correct answer -HUD.gov
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? - correct answer -Conventional loan
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? -
correct 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? -
correct answer -Loan Estimate
What is a pre-approval from a lender? - correct 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? - correct 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
