HUD Housing Counselor Certification
Practice Exam Questions and Answers
1. What is the maximum percent of area median income allowable
for a house- hold to qualify for a Housing Choice Voucher?: 50%
2. Which is the maximum recommended housing ratio for renting
an apart- ment?: 30%
3. Eligibility requirements for down-payment assistance
programs include which factors?: Income, home-buyer education, purchase
price
4. The client is considering an FHA mortgage. What is the upfront
mortgage insurance premium (UFMIP) for an
FHA mortgage?: 1.75%
5. 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?: Contact the Federal Trade Commission as the lender's action might
violate the Equal Credit Opportunity Act
,6. A question from a lender on the client's Medical History would be
inappropri- ate or appropriate?: Inappropriate
7. Who is responsible for educating home-buyers about their rights?:
Housing Counselor
8. 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?: A 30-day period
9. What are the responsibilities of a home inspector?: Examine mechanical
systems, Evaluate the condition of a home, Identify items to be repaired or replaced
10. Which is the best reason that a housing counselor would suggest
that a client speak to three to five different lenders?: To compare loan
estimates
11. Which is the best advice that a housing counselor can
give the client to protect against identity theft?: Review credit report at
least once per year
12. 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?: Provide a loan estimate without factoring in the raise
,13. If this client obtains a mortgage of $100,000, typically, how
much should he expect to pay for closing costs?: $3000 to $4000
14. Is Application Fee an upfront cost of clients who are
considering renting or buying a property?: Renting
15. 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-owner- ship or Renting?: Home-ownership
16. 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?: $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.
17. Which is the maximum debt-to-income ratio allowable for an
FHA loan?: 43%
, 18. Which is the maximum debt-to-income ratio allowable for
an FHA Energy Efficiency Mortgage loan?: 45%
19. 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)?: 33%
20. 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)?: $1,292
21. On which factor is a borrower's annual mortgage insurance
premium (MIP) based?: 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 attect MIP but might attect PMI.
22. Which is the upfront mortgage insurance premium
(UFMIP) if the client purchases a home with an FHA loan amount
of $116,000?: $2,030
Practice Exam Questions and Answers
1. What is the maximum percent of area median income allowable
for a house- hold to qualify for a Housing Choice Voucher?: 50%
2. Which is the maximum recommended housing ratio for renting
an apart- ment?: 30%
3. Eligibility requirements for down-payment assistance
programs include which factors?: Income, home-buyer education, purchase
price
4. The client is considering an FHA mortgage. What is the upfront
mortgage insurance premium (UFMIP) for an
FHA mortgage?: 1.75%
5. 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?: Contact the Federal Trade Commission as the lender's action might
violate the Equal Credit Opportunity Act
,6. A question from a lender on the client's Medical History would be
inappropri- ate or appropriate?: Inappropriate
7. Who is responsible for educating home-buyers about their rights?:
Housing Counselor
8. 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?: A 30-day period
9. What are the responsibilities of a home inspector?: Examine mechanical
systems, Evaluate the condition of a home, Identify items to be repaired or replaced
10. Which is the best reason that a housing counselor would suggest
that a client speak to three to five different lenders?: To compare loan
estimates
11. Which is the best advice that a housing counselor can
give the client to protect against identity theft?: Review credit report at
least once per year
12. 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?: Provide a loan estimate without factoring in the raise
,13. If this client obtains a mortgage of $100,000, typically, how
much should he expect to pay for closing costs?: $3000 to $4000
14. Is Application Fee an upfront cost of clients who are
considering renting or buying a property?: Renting
15. 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-owner- ship or Renting?: Home-ownership
16. 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?: $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.
17. Which is the maximum debt-to-income ratio allowable for an
FHA loan?: 43%
, 18. Which is the maximum debt-to-income ratio allowable for
an FHA Energy Efficiency Mortgage loan?: 45%
19. 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)?: 33%
20. 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)?: $1,292
21. On which factor is a borrower's annual mortgage insurance
premium (MIP) based?: 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 attect MIP but might attect PMI.
22. Which is the upfront mortgage insurance premium
(UFMIP) if the client purchases a home with an FHA loan amount
of $116,000?: $2,030
