Housing Counselor Exam Prep Questions & Answers
Already Passed!!
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When no payments made after 60 to 90 days... 30 for FHA loans
Front-End Ratio Equation
Monthly housing expenses/gross monthly income
Front-End Ratio maximums
28% or less - conventional loan
31% or less for FHA, 30% or less for rentals
Back-End Ratio (Debt-to-Income) Equation
total monthly debt expenses/gross monthly income
Back-End Ratio Caps
36% for conventional loans and renters, 43% for FHA, 45% for Energy Efficiency
Mortgage loan
Four C's of Credit
Character, Capacity, Capital, Collateral
Monthly housing expenses - PITIA
Principal, Interest, Taxes, Insurance, Association dues and special assessments
Interest only Terms
Only pay interest in monthly payments - good for fluctuating income, but can make
payments on principal when they can
FHA loans good for:
those who do not qualify for conventional because of flawed credit history, bankruptcy,
high debt-to-income ratios, or limited funds for down payment & closing costs
USDA loans
United States Department of Agriculture - Rural development program
USDA guaranteed loans are for
those who make less than 115% of Area Median Income, or AMI, no funds for down
payment, and without adequate housing.
USDA Direct loans are for
those who make less than 80% of AMI, unable to obtain other financing but have
reasonable credit... loans can go for up to 33 or 38 years
Mortgage Insurance
Protects lender if you stop making payments, Required if down payment is less than
20% of home value
2nd Mortgage - "Piggy back"
assures 1st mortgage is only 80% of sales price -- will mean higher interest rates and
more fees
Loan to Value Ratio -- LTV Ratio
% calculated by dividing the amount of outstanding loan amount by the value of home
Lender must terminate PMI when LTV ratio reaches:
78% OR at midpoint of loan, i.e. 15 years of 30 year mortgage
Adjustable Rate Mortgage
30 year, interest rate set for 1st 5 years then adjusts annually
, ARM good for:
Those who have $ for down payment, wants lower interest rate for few years and may
not own home for more than 5 years
Federal Housing Choice Voucher Program - Section 8 - Distributed by local Public
Housing Agency, or PHA
Family income must be lower than 50% of AMI, Voucher must pay 30% of gross
income, family pays the rest
Redlining
Illegal Practice of refusing to make loans because of predominant race, color, national
origin, religion, sec, disability or familial status of the residents in the neighborhood
Blockbusting
Trying to convince someone to sell or rent a dwelling because of the entry into the
neighborhood of a particular person
1954 Brown vs Board of Education
Supreme Court says GOV can longer support segregated programs
Civil Acts Right of 1964
No discrimination in programs that receive federal funding
Civil Acts Right of 1968
Title VIII - "Fair Housing Act - prohibited discrimination in housing sales, rentals and
financing based on race, color, national origin and religion.
How long you have to file a complaint
12 months after incident occurred.
Fair Housing Act now protects how many characteristics?
7 -- race, color, national origin, religion, sex, disability, and familial status
Reasonable Modification
Structural modification made to allow persons with disabilities full enjoyment of facilities
Reasonable Accommodation
Change in rules, policies, practices, or services
Fair Housing Assistance Program
FHAP - Provides funding to state and local agencies to help enforce fair housing laws.
Fair Housing Initiatives Program
FHIP - Provides funding to fair housing organizations and nonprofits that assist possible
victims of housing discrimination
Process of Filing a Complaint
Intake, Filing, Investigation, Pre-determination Conciliation
Marketing Analysis
Aims to identify groups of ppl who would benefit most if targeted by the campaign, their
characteristics, and their expectations
To assist clients who may utilize them, counselors should research AFFH rules
for:
HUD-funded program
Designed to help State or Local jurisdictions to access housing development
needs
Consolidated Plan
URLA form
Already Passed!!
Default
When no payments made after 60 to 90 days... 30 for FHA loans
Front-End Ratio Equation
Monthly housing expenses/gross monthly income
Front-End Ratio maximums
28% or less - conventional loan
31% or less for FHA, 30% or less for rentals
Back-End Ratio (Debt-to-Income) Equation
total monthly debt expenses/gross monthly income
Back-End Ratio Caps
36% for conventional loans and renters, 43% for FHA, 45% for Energy Efficiency
Mortgage loan
Four C's of Credit
Character, Capacity, Capital, Collateral
Monthly housing expenses - PITIA
Principal, Interest, Taxes, Insurance, Association dues and special assessments
Interest only Terms
Only pay interest in monthly payments - good for fluctuating income, but can make
payments on principal when they can
FHA loans good for:
those who do not qualify for conventional because of flawed credit history, bankruptcy,
high debt-to-income ratios, or limited funds for down payment & closing costs
USDA loans
United States Department of Agriculture - Rural development program
USDA guaranteed loans are for
those who make less than 115% of Area Median Income, or AMI, no funds for down
payment, and without adequate housing.
USDA Direct loans are for
those who make less than 80% of AMI, unable to obtain other financing but have
reasonable credit... loans can go for up to 33 or 38 years
Mortgage Insurance
Protects lender if you stop making payments, Required if down payment is less than
20% of home value
2nd Mortgage - "Piggy back"
assures 1st mortgage is only 80% of sales price -- will mean higher interest rates and
more fees
Loan to Value Ratio -- LTV Ratio
% calculated by dividing the amount of outstanding loan amount by the value of home
Lender must terminate PMI when LTV ratio reaches:
78% OR at midpoint of loan, i.e. 15 years of 30 year mortgage
Adjustable Rate Mortgage
30 year, interest rate set for 1st 5 years then adjusts annually
, ARM good for:
Those who have $ for down payment, wants lower interest rate for few years and may
not own home for more than 5 years
Federal Housing Choice Voucher Program - Section 8 - Distributed by local Public
Housing Agency, or PHA
Family income must be lower than 50% of AMI, Voucher must pay 30% of gross
income, family pays the rest
Redlining
Illegal Practice of refusing to make loans because of predominant race, color, national
origin, religion, sec, disability or familial status of the residents in the neighborhood
Blockbusting
Trying to convince someone to sell or rent a dwelling because of the entry into the
neighborhood of a particular person
1954 Brown vs Board of Education
Supreme Court says GOV can longer support segregated programs
Civil Acts Right of 1964
No discrimination in programs that receive federal funding
Civil Acts Right of 1968
Title VIII - "Fair Housing Act - prohibited discrimination in housing sales, rentals and
financing based on race, color, national origin and religion.
How long you have to file a complaint
12 months after incident occurred.
Fair Housing Act now protects how many characteristics?
7 -- race, color, national origin, religion, sex, disability, and familial status
Reasonable Modification
Structural modification made to allow persons with disabilities full enjoyment of facilities
Reasonable Accommodation
Change in rules, policies, practices, or services
Fair Housing Assistance Program
FHAP - Provides funding to state and local agencies to help enforce fair housing laws.
Fair Housing Initiatives Program
FHIP - Provides funding to fair housing organizations and nonprofits that assist possible
victims of housing discrimination
Process of Filing a Complaint
Intake, Filing, Investigation, Pre-determination Conciliation
Marketing Analysis
Aims to identify groups of ppl who would benefit most if targeted by the campaign, their
characteristics, and their expectations
To assist clients who may utilize them, counselors should research AFFH rules
for:
HUD-funded program
Designed to help State or Local jurisdictions to access housing development
needs
Consolidated Plan
URLA form
