Certified Occupancy Specialist COS
Practice Exam QUESTIONS AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2025
1. What is the primary regulation governing HUD's multifamily housing
programs?
A. Section 504 of the Rehabilitation Act
B. Civil Rights Act of 1964
C. HUD Handbook 4350.3 REV-1
D. Fair Housing Act
HUD Handbook 4350.3 REV-1 provides detailed occupancy
requirements for subsidized housing programs and is the foundational
document for COS certification.
2. What is the correct formula for calculating adjusted income?
A. Annual income minus medical expenses
B. Gross income plus allowances
, C. Annual income minus allowable deductions
D. Earned income minus taxes
Adjusted income is calculated by subtracting HUD-allowed deductions
from the household’s annual income.
3. Which income must be included in the annual income calculation?
A. Income from full-time students over 18
B. Value of food stamps
C. Regular cash contributions from outside the household
D. Earned income of minors
Regular contributions from outside the household are considered
income under HUD rules.
4. What is the asset limit for eligibility in HUD programs?
A. $5,000
B. There is no asset limit, but income from assets is counted
C. $10,000
D. $50,000
HUD does not impose an asset limit; however, income generated from
those assets must be included.
5. How is imputed income from assets calculated?
A. Based on actual income received
B. Based on household size
C. Based on HUD’s published passbook rate
D. Based on the asset’s market value
, Imputed income is calculated using the passbook rate applied to total
assets exceeding $5,000.
6. When must third-party verification be attempted according to HUD
guidelines?
A. Only for assets over $10,000
B. Whenever possible, before using other methods of verification
C. After tenant certification
D. Only during move-in
HUD prefers third-party verification as the most reliable method of
verifying tenant information.
7. What is the recertification period for HUD tenants?
A. Every 6 months
B. Annually
C. Every 2 years
D. Only at move-in
Tenants must be recertified annually to ensure continued program
eligibility.
8. What action should be taken if a tenant fails to recertify?
A. Increase the rent slightly
B. Raise the tenant’s rent to market rate
C. Evict the tenant
D. Offer a grace period
, If a tenant fails to recertify, their rent must be increased to the market
(or maximum) rent allowed by the contract.
9. What is an EIV report used for?
A. Determining unit rent
B. Reporting maintenance issues
C. Verifying income and employment
D. Calculating utility allowances
The EIV (Enterprise Income Verification) system checks employment
and income data against government records.
10. Which of the following is NOT an allowable deduction from
annual income?
A. Child care costs
B. Medical expenses (for elderly or disabled households)
C. Credit card debt
D. Dependent allowance
Personal debt such as credit cards is not an allowable deduction.
11. A tenant disputes the amount of income shown in the EIV
report. What should the COS do?
A. Accept the tenant’s word
B. Request third-party verification and document the file
C. Terminate the lease
D. Ignore the discrepancy
Practice Exam QUESTIONS AND
CORRECT ANSWERS (VERIFIED
ANSWERS) PLUS RATIONALES 2025
1. What is the primary regulation governing HUD's multifamily housing
programs?
A. Section 504 of the Rehabilitation Act
B. Civil Rights Act of 1964
C. HUD Handbook 4350.3 REV-1
D. Fair Housing Act
HUD Handbook 4350.3 REV-1 provides detailed occupancy
requirements for subsidized housing programs and is the foundational
document for COS certification.
2. What is the correct formula for calculating adjusted income?
A. Annual income minus medical expenses
B. Gross income plus allowances
, C. Annual income minus allowable deductions
D. Earned income minus taxes
Adjusted income is calculated by subtracting HUD-allowed deductions
from the household’s annual income.
3. Which income must be included in the annual income calculation?
A. Income from full-time students over 18
B. Value of food stamps
C. Regular cash contributions from outside the household
D. Earned income of minors
Regular contributions from outside the household are considered
income under HUD rules.
4. What is the asset limit for eligibility in HUD programs?
A. $5,000
B. There is no asset limit, but income from assets is counted
C. $10,000
D. $50,000
HUD does not impose an asset limit; however, income generated from
those assets must be included.
5. How is imputed income from assets calculated?
A. Based on actual income received
B. Based on household size
C. Based on HUD’s published passbook rate
D. Based on the asset’s market value
, Imputed income is calculated using the passbook rate applied to total
assets exceeding $5,000.
6. When must third-party verification be attempted according to HUD
guidelines?
A. Only for assets over $10,000
B. Whenever possible, before using other methods of verification
C. After tenant certification
D. Only during move-in
HUD prefers third-party verification as the most reliable method of
verifying tenant information.
7. What is the recertification period for HUD tenants?
A. Every 6 months
B. Annually
C. Every 2 years
D. Only at move-in
Tenants must be recertified annually to ensure continued program
eligibility.
8. What action should be taken if a tenant fails to recertify?
A. Increase the rent slightly
B. Raise the tenant’s rent to market rate
C. Evict the tenant
D. Offer a grace period
, If a tenant fails to recertify, their rent must be increased to the market
(or maximum) rent allowed by the contract.
9. What is an EIV report used for?
A. Determining unit rent
B. Reporting maintenance issues
C. Verifying income and employment
D. Calculating utility allowances
The EIV (Enterprise Income Verification) system checks employment
and income data against government records.
10. Which of the following is NOT an allowable deduction from
annual income?
A. Child care costs
B. Medical expenses (for elderly or disabled households)
C. Credit card debt
D. Dependent allowance
Personal debt such as credit cards is not an allowable deduction.
11. A tenant disputes the amount of income shown in the EIV
report. What should the COS do?
A. Accept the tenant’s word
B. Request third-party verification and document the file
C. Terminate the lease
D. Ignore the discrepancy
