HUD Practice Test: Understanding Homeownership and Renting Scenarios, Exams of Nursing

Download HUD Practice Test: Understanding Homeownership and Renting Scenarios and more Exams Nursing in PDF only on Docsity! HUD Practice Test and Correct Answers (latest Update 2024) Which document is most important when working with a client to develop an initial budget as part of a Client Action Plan? - Correct Answer ✅Pay Stub A client would like to purchase a home within one year. The client is motivated to increase household income as a way to save for a down payment and qualify for a loan. Which is the best solution for the client to reach this goal? - Correct Answer ✅Find a second job A credit report may contain which information? - Correct Answer ✅The number of accounts in collection status Six months ago a client left a job as a reporter to start a business in the retail industry. To prepare to buy a house, the client closed credit card accounts and has been using savings to pay down credit card debt and collections. The client has not been able to save much for a down payment with all the debt payments but knows about an affordable homeownership program that only requires a 1% down payment with an FHA HUD Practice Test and Correct Answers (latest Update 2024) loan. What might result from the client closing the credit card accounts? - Correct Answer ✅It increases credit utilization, causing a negative impact on the credit score. Which action would a client take to improve a credit score? - Correct Answer ✅Pay delinquent accounts A client does not receive a written monthly statement from the credit card company. Which credit law could this omission violate? - Correct Answer ✅Fair Credit Billing Act A client shopping for a mortgage loan presents a housing counselor with an offer from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a 20% down payment required. The counselor reviews the client file and determines the client's credit score is 725 and the client's total debt-to-income ratio is 20%. - Correct Answer ✅"I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources." HUD Practice Test and Correct Answers (latest Update 2024) Under which condition would most down payment assistance programs approve a waiver of the homeownership education requirement? - Correct Answer ✅Most will not waive the homeownership education requirement. Which type of assistance administered by a public housing authority allows for location flexibility? - Correct Answer ✅Tenant-based vouchers A client's payment history affects which factor of creditworthiness? - Correct Answer ✅Character Which action may a lender take to determine a borrower's character? - Correct Answer ✅Call an employer to verify employment A client is in the process of purchasing a home with a sales price of $162,000. The client has a net worth of $50,000, a credit score of 680, and a debt-to-income ratio of 36%. The home has appraised for $155,000. Which factor of creditworthiness will most likely be an obstacle to purchasing the home? - Correct Answer ✅Collateral HUD Practice Test and Correct Answers (latest Update 2024) When a lender inquires about how much money a borrower has saved for a down payment on a home, what factor is being considered? - Correct Answer ✅Capital A first-time buyer wants a conventional loan but does not have the assets to qualify. This client may have to purchase with an FHA loan unless the client saves more money. Which of the Four C's of Credit does this involve? - Correct Answer ✅Capital Which describes a homebuyer who would be ineligible as a first-time homebuyer, as defined by most down payment assistance programs? - Correct Answer ✅A client who lost a home to foreclosure two years ago. Which step does a homebuyer complete in the process of purchasing a home? - Correct Answer ✅Get a home inspection HUD Practice Test and Correct Answers (latest Update 2024) A counselor's understanding of the client's spending habits and use of credit are most important in which step of the homebuying process? - Correct Answer ✅Determining if homeownership is right for the client Which charge cannot change from the Loan Estimate to the Closing Disclosure? - Correct Answer ✅Fees paid to lender Which is the minimum qualifying credit score for an FHA mortgage if the client made a 3.5% down payment? - Correct Answer ✅580 A client has saved money for a small down payment and closing costs to purchase a $100,000 home in the city. The client is deciding whether to begin the homebuying process now or continue saving for a larger down payment. Which loan type would provide the highest monthly payment, assuming interest rates and other factors are equal? - Correct Answer ✅FHA Loan A client, who is the surviving spouse of a military service member, is interested in buying a home. The client now HUD Practice Test and Correct Answers (latest Update 2024) Which entity would be most likely to issue a Housing Choice Voucher? - Correct Answer ✅Local housing authority What is the purpose of the Veterans Affairs Supportive Housing (VASH) program? - Correct Answer ✅To end veteran homelessness A tenant's apartment building has been sold. The new owners have informed the tenant that the rent will immediately increase by $100 a month despite having four months left on the written lease. Which best describes the situation? - Correct Answer ✅New landlord has to honor the existing lease Which is a typical responsibility of a landlord? - Correct Answer ✅Repairing a leak in the roof A client is currently renting month to month (tenancy at sufferance). What advice should a housing counselor HUD Practice Test and Correct Answers (latest Update 2024) recommend to better secure the housing? - Correct Answer ✅Seek a new written lease agreement Which circumstance is generally covered by renter's insurance? - Correct Answer ✅A pipe burst in the apartment above the tenant's unit and causes water damage to the tenant's personal belongings. Which family is most likely to qualify for the Earned Income Tax Credit (EITC)? - Correct Answer ✅A individual employed part time in a minimum wage job Delinquency on which type of payment can cause a lien to be placed on a client's property? - Correct Answer ✅Homeowners association dues Which is a possible outcome for member residents if a homeowners association (HOA) imposes a community assessment? - Correct Answer ✅Residents would be required to pay a share of expenses related to capital improvements to the common areas. HUD Practice Test and Correct Answers (latest Update 2024) A homeowner has decided to remodel the basement over the next 12 months. The project should cost just under $24,000, and the hope is to borrow the money at a very low interest rate that can be paid off over a longer period of time. Which home financing option would work best? - Correct Answer ✅HELOC A potential homebuyer with minimal savings for a down payment and a low credit score is most likely to qualify for which mortgage? - Correct Answer ✅USDA Which is the most significant benefit of using a real estate agent? - Correct Answer ✅Negotiating the sale Which item is critical to consider when working with a client to prepare a household system maintenance plan? - Correct Answer ✅Target replacement date Which strategy most effectively increases a home's energy efficiency? - Correct Answer ✅Increase attic insulation HUD Practice Test and Correct Answers (latest Update 2024) What should a counselor and tenant focus on when developing an emergency budget? - Correct Answer ✅Increasing income and decreasing expenses A client is delinquent on the mortgage and at risk of default. The client is considering signing the deed over to a real estate investor to avoid foreclosure. What should the housing counselor recommend? - Correct Answer ✅Advise against signing over the deed to a real estate investor as a solution to avoid foreclosure. Which option would be most likely to require that the mortgage is current for eligibility? - Correct Answer ✅Refinance A family suffers a loss of income due to unemployment and is now facing a pending foreclosure. After reviewing the family's budget, the housing counselor learns that the family has a negative cash flow of almost $300. The housing counselor recommends adjusting expenses, which results in a positive cash flow of $400 per month. The family would like to pursue an FHA retention option. They are seven months behind on HUD Practice Test and Correct Answers (latest Update 2024) the mortgage and their debt-to-income ratio is 29%. Which option is best for this situation? - Correct Answer ✅Special Forbearance Which aspect of a loan may a client be able to modify when seeking a loan modification due to a financial hardship because of a divorce? - Correct Answer ✅Loan Term What information is needed to counsel every client through the loss mitigation process? - Correct Answer ✅Type of mortgage Why is it important to include a 4506-T form when submitting a loss mitigation package? - Correct Answer ✅Because it authorizes the servicer to obtain the client's tax returns Which retention option would most likely offer a principal reduction? - Correct Answer ✅Loan Modification A client who is not behind on the mortgage was recently informed of a reduction of income for two months by the HUD Practice Test and Correct Answers (latest Update 2024) client's employer. The client has an FHA loan and would like to take action as soon as possible to avoid a mortgage delinquency. Which FHA Loss Mitigation option is likely best for this client? - Correct Answer ✅Informal/Formal Forbearance What loss mitigation option may allow a borrower an FHA Partial Claim? - Correct Answer ✅FHA-HAMP Loan Modification Which type of organization making an unsolicited offer to avoid foreclosure could indicate a scam? - Correct Answer ✅A company that offers "government-approved" loan modifications How should a homeowner interpret a letter from a lawyer offering to stop foreclosure proceedings for an upfront fee? - Correct Answer ✅As a possible scam Which option allows the borrower to avoid foreclosure by disposing of a property for an amount less than the HUD Practice Test and Correct Answers (latest Update 2024) Which practice is a legal exception to the Fair Housing Act? - Correct Answer ✅Making housing operated by a religious organization unavailable to those who are not members of the organization Which practice remained legal after the passage of the Civil Rights Act of 1964? - Correct Answer ✅** Which are protected characteristics under the federal Fair Housing Act? - Correct Answer ✅Race, religion, disability Which is a potential violation of the Fair Housing Act? - Correct Answer ✅An apartment owner only rents ground- level apartments to tenants of Asian ethnicity. A single, gay, African-American parent with four kids is turned away from a property because the landlord does not want the kids to destroy the property. Which protected characteristic of discrimination most likely fits this case? - Correct Answer ✅Familial status HUD Practice Test and Correct Answers (latest Update 2024) Which HUD program provides funding to nonprofits that assist people who may have been victims of housing discrimination? - Correct Answer ✅Fair Housing Initiatives Program (FHIP) When filing a fair housing complaint, why is it important to provide the date of the alleged violation? - Correct Answer ✅Because complaints are only valid if they are filed within a given period of time While meeting with a housing counselor, a client describes a possible housing discrimination situation. Which is the best way to handle the violation? - Correct Answer ✅File a complaint online with HUD Which is a campaign to inform the public about fair housing rights? - Correct Answer ✅Affirmatively Furthering Fair Housing Program