Housing Counselor Certification (HUD) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the HUD Housing Counselor Certification Exam with comprehensive flashcards and multiple choice questions that offer hints and detailed explanations. Get ready to excel!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of mortgage is specifically designed for low to moderate-income individuals or families?

Conventional Loan
FHA Loan
Jumbo Loan
Reverse Mortgage

The correct answer is: FHA Loan

The FHA loan is specifically designed to assist low to moderate-income individuals or families in obtaining home financing. This type of loan, insured by the Federal Housing Administration (FHA), allows for lower down payment requirements and has more flexible credit score standards compared to conventional loans. This design aims to improve access to home ownership for those who may face barriers due to financial constraints. In contrast, conventional loans typically require higher credit scores and down payments, making them less accessible for lower-income borrowers. Jumbo loans exceed the conforming loan limits and, therefore, are not suited for individuals looking for affordable options. Reverse mortgages are intended for older homeowners, typically those aged 62 or older, allowing them to convert part of their home equity into cash, which is not specifically aimed at low to moderate-income individuals or families looking to purchase a home. Thus, the FHA loan stands out as the most suitable choice for those in need of assistance in reaching homeownership.