LATEST HUD HC Cert Exam - Review 1 100% SOLUTION 2024

What is the maximum percent of area median income allowable for a household to qualify for a Housing Choice Voucher? - ANSWER 50% Which is the maximum recommended housing ratio for renting an apartment? - ANSWER 30% Eligibility requirements for down-payment assistance programs include which factors? - 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? - 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? - 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? - ANSWER Inappropriate Who is responsible for educating home-buyers about their rights? - 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? - ANSWER A 30-day period What are the responsibilities of a home inspector? - 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? - ANSWER To compare loan estimates Which is the best advice that a housing counselor can give the client to protect against identity theft? - 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? - 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? - ANSWER $3000 to $4000 Is Application Fee an upfront cost of clients who are considering renting or buying a property? - 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? - 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? - 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? - ANSWER 43% Which is the maximum debt-to-income ratio allowable for an FHA Energy Efficiency Mortgage loan? - 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)? - 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)? - ANSWER $1,292 On which factor is a borrower's annual mortgage insurance premium (MIP) based? - 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? - 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 - 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 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 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.