Housing Counselor Certification (HUD) Practice Exam

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

Prepare for the Housing Counselor Certification (HUD) Exam. Study with flashcards and multiple choice questions featuring hints and explanations for each question. Get ready for your certification!

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.

Which of the following best describes the FHA loan limits?

Set nationally, regardless of the area
Determined based on borrower income
Vary according to the median home prices in the area
Fixed for all borrowers across the country

The correct answer is: Vary according to the median home prices in the area

The correct choice highlights that FHA loan limits are specifically influenced by the median home prices within different geographical areas. This means that areas with higher median home prices will have higher loan limits, while areas with lower median home prices will have lower limits. This approach allows the FHA to better accommodate the needs of buyers in varying markets across the country, ensuring that financing options are accessible in both high-cost and low-cost regions. In contrast, the other options do not accurately reflect how FHA loan limits operate. Loan limits are not set nationally for all borrowers regardless of location, nor are they fixed across the country. Additionally, while borrower income may affect certain types of loans, FHA loan limits are not based on borrower income levels but rather on local market conditions. This structure helps foster equitable access to home financing opportunities tailored to the dynamics of different local real estate markets.