HUD Housing Counselor Exam: Key Concepts in Real Estate and Housing Finance, Exams of Nursing

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1. Adjustable Rate Mortgage (ARM) - answers> Adjustable rate mortgages have an initial rate that applies for a defined period of time (typically from one month to 10 years), then adjusts at pre-determined intervals for the life of the loan. Interest rates can increase or decrease when adjusted.
2. Adjusted Gross Income - answers> Gross income minus adjustments, or reductions, that one is eligible for, such as deductions for unreimbursed business expenses, tuition and fees, and contributions to certain retirement accounts.
3. AFFH - answers> Affirmatively Furthering Fair Housing
4. AFHMP - answers> Affirmative Fair Housing Marketing Plan
5. Analysis of Impediments (AI) - answers> Analysis of Impediments is a review of impediments or barriers that affect the rights of fair housing choice. It covers public and private policies, practices, and procedures affecting housing choice. Impediments to fair housing choice are defined as any actions, omissions, or decisions that restrict, or have the effect of restricting, the availability of housing choices, based on race, color, religion, sex, disability, familial status, or national origin. The AI supports fair housing planning; provides essential information to policy makers, administrative staff, housing providers, lenders, and fair housing advocates; and assists in building public support for fair housing efforts.
6. Area Median Income (AMI) - answers> The midpoint in the family income range for a metropolitan statistical area or for the non-metropolitan parts of a state. Determined annually by HUD, the figure often is used as a basis to stratify incomes into very low, low, moderate, and above moderate. Frequently used to determine income eligibility for various housing programs.

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7. Arrearages - answers> The total amount of past due payments owed to a lender from a borrower in mortgage payments or to a landlord from a tenant in rental payments. Also called arrears.
8. Assistance Animal - answers> An assistance animal is not considered a pet. it is an animal that works, provides assistance, or performs tasks for the benefit of a person with a disability, or provides emotional support that alleviates one or more identifies symptoms or effects of a person's disability. For purposes of reasonable accommodation requests, the Fair Housing Act does not require an assistance animal to be individually trained or certified. While dogs are the most common type of assistance animal, other animals can also be assistance animals.
9. Association Dues - answers> Charged by a community or Homeowners Association to pay for repairs, upkeep, landscaping, improvements, and property management.
10. Back-End Ratio - answers> A rate that calculates a borrower's total monthly debt, including housing and other debt obligations, as a percentage of gross monthly income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a debt-to- income ratio.
11. Balloon Payment - answers> An oversize payment due at the end of a mortgage.
12. Blockbusting - answers> To convince, or attempt to convince, a person to sell or rent a dwelling because of the entry, or prospective entry, into the neighborhood of a person or persons of a particular race, color, religion, sex, familial status, national origin, or with a disability.
13. Cash-for-keys - answers> An alternative to a legal eviction following foreclosure. The occupant receives cash funds from the servicer in exchange for turning in the keys and vacating the property. Certain conditions apply, such as returning the property in broom- clean condition and with all appliances.

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14. CDBG - answers> Community Development Block Grant
15. CFPB - answers> Consumer Financial Protection Bureau
16. Closing Costs - answers> Fees for final property transfer that are not included in the price of the property. Typical closing costs can include loan origination fees, discount points, appraisal fee, survey, title insurance, legal fees, real estate professional fees, prepayments of taxes and insurance, etc. While closing costs often range from 3% to 4% of the purchase price of the home, they can be lower or higher depending on the geographic region or loan type.
17. Collection - answers> An account in default with an original creditor and sold to a third- party debt collector that will continue attempts to collect past due payments.
18. Community Development Block Grant Program - answers> HUD program that provides grants to states and localities to provide decent housing and a suitable living environment and to expand economic opportunities, principally for low- and moderate- income persons.
19. Complainant - answers> A person, group, or company that files a complaint which claims that someone has violated a law.
20. Conciliation - answers> The attempted resolution of issues raised by a complaint, or by the investigation of such complaint, through informal negotiations involving the aggrieved person, the respondent, and the HUD Secretary.
21. Conciliation Agreement - answers> A written agreement setting terms for the resolution of the issues in conciliation.

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22. Consolidated Plan - answers> A plan designed to help states and local jurisdictions to assess their affordable housing and community development needs and market conditions, and to make data-driven, location-based investment decisions.
23. Conventional Loan - answers> A mortgage loan backed by private lenders. Though not insured by any government program, such as FHA or VA, loans with a down payment less than 20% of the purchase price may require private mortgage insurance.
24. Conventional Mortgage - answers> A private sector loan typically issued to borrowers with high credit ratings. Excludes subprime loans or mortgages insured by the U.S. government.
25. Credit Score - answers> The numerical interpretation of a consumer's creditworthiness based on information in his or her credit report.
26. Debt-to-Income Ratio - answers> A rate that calculates a borrower's total monthly debt, including housing and other debt obligations, as a percentage of gross monthly income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a back-end ratio.
27. Deed-in-Lieu - answers> A process that allows a homeowner to avoid foreclosure, providing a deed "in lieu" of foreclosure to the lender. Except in certain states or by agreement between homeowner and servicer, the sale does necessarily satisfy the borrower's debt and may result in a deficiency judgement. Though it helps avoid foreclosure, the process does not allow the homeowner to stay in the home.
28. Deed Restrictions - answers> Legally enforceable terms that govern the use of property. These terms are transferred with the property deed. Discriminatory deeds are illegal and unenforceable. Also known as a covenant, condition, restriction, or restrictive covenant.

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29. Default - answers> The inability to make timely payments or fulfill legal obligations of loan terms. Mortgage loans are typically considered in default when a payment has not been made after 60 to 90 days.
30. Deficiency Judgement - answers> Assessment of liability by a court against a homeowner for the unpaid balance owed to the servicer after a foreclosure, short sale, or deed-in- lieu if the sale does not cover the full amount owed.
31. Delinquent - answers> The failure of a borrower to make timely mortgage payments under a loan agreement. Most mortgages allow for a grace period, generally ten to fifteen days, before a late fee may be assessed.
32. Discount Points - answers> A type of pre-paid interest normally paid at closing and generally calculated to be equivalent to 1% of the total loan amount. The borrower pays them to reduce the interest rate on a loan. You can purchase a lender-determined number of discount points to give you a lower rate and lower monthly mortgage payment.
33. Down Payment - answers> A cash payment that homebuyers are typically required to pay when closing on a home loan, which represents a percentage of the total price of the home.
34. DPA - answers> Down Payment Assistance
35. Dr. Martin Luther King Jr. - answers> Dr. Martin Luther King was a leader in the African- American Civil Rights movement. Using nonviolent methods, he fought for racial equality in all spheres of life, including employment, education, and housing.

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36. Dual Tracking - answers> A process that occurs when the servicer moves forward with foreclosure while simultaneously working with the borrower to avoid foreclosure. Restricted by the CFPB mortgage servicing regulations.
37. ECOA - answers> Equal Credit Opportunity Act
38. Emergency Budget - answers> A household budget created to increase savings, reduce expenses, and/or pay down debt in financial emergency situations.
39. Equity - answers> Value of ownership interest in property. Determined by the difference between the fair market value of a property and the remaining mortgage balance owed.
40. Escrow - answers> Funds to be used for specific purposes by parties carrying out a mutual transaction, deposited with a third party. Commonly used by lenders to allocate funds for a homeowner's property taxes, insurance premiums, or other fees when they become due.
41. Escrow Account - answers> An account in which escrow funds are held to be used for specific purposes by parties carrying out a mutual transaction. While there are many used for an escrow account, they are commonly used by lenders to set aside a portion of monthly mortgage payments needed to cover property taxes, homeowners insurance, or other fees.
42. Eviction - answers> A legal process by which someone is expelled from a property, usually a tenant from a rental property.
43. Fair Housing Assistance Program (FHAP) - answers> Provides funding to state and local agencies that enforce these additional fair housing protections, as long as the protections are substantially equivalent to the Fair Housing Act.

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44. Fair Housing Initiatives Program (FHIP) - answers> Provides funding to fair housing organizations and nonprofits that assist people who may have been victims of housing discrimination.
45. Fair Market Rent (FMR) - answers> A determination of the monthly rent of a rental property, calculated by HUD. Factored by geography and unit size, it sets payment standards for public housing programs.
46. FEMA - answers> Federal Emergency Management Agency
47. FHA - answers> Federal Housing Administration
48. FICO Score - answers> Credit scores are often referred to simply as FICO scores. FICO (Fair Isaac Corporation) is the most commonly used scoring model for lending and credit decisions in the U.S., though other scoring modules do exist. FICO scores range from 300 to 850 where higher is better. Consumers have a FICO score from each of the three credit reporting agencies - Equifax, Experian, and Transunion. Other credit scoring models do exist, so not all credit scores available for purchase online are FICO scores.
49. First-Time Homebuyer - answers> An individual who has not owned a primary residence for at least three years prior to purchasing a home. This includes a single parent or displaced homeowner who has only owned with a spouse or former spouse. A married couple is considered a first-time homebuyer is either spouse meets the criteria.
50. Fixed-Rate Mortgage - answers> A mortgage that has an interest rate that does not fluctuate, but rather stays the same over the term of the mortgage. Typically comes in a 30-year or 15-year term.

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51. Foreclosure - answers> A legal process in which mortgaged property is sold to pay the loan of a defaulting borrower. Foreclosure laws are based on the statutes of each state.
52. Formula Grants - answers> Formula grant programs are noncompetitive awards that participating organizations that meet certain minimum requirements are entitled to receive. These grants are administered by state and local administrations.
53. Front-End Ratio - answers> A rate that calculates a borrower's housing-related obligations as a percentage of gross monthly income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a housing ratio.
54. GFE - answers> Good Faith Estimate
55. GSE Loan or Mortgage - answers> A government-sponsored enterprise, or GSE, is a financial services entity created by Congress. A GSE loan or mortgage refers to a mortgage owned by Fannie Mae or Freddie Mac.
56. Gross Income - answers> Money earned before taxes and other deductions. May include income from self-employment, rental property, alimony, child support, public assistance payments, and retirement benefits.
57. Ground Rent - answers> An arrangement in which the owner of a dwelling or structure does not own the land on which the structure resides. In such cases, the borrower takes out a mortgage to purchase the dwelling, but must still pay rent for the land.
58. HAMP - answers> Home Affordable Modification Program, a component of Making Home Affordable.

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59. HARP - answers> Home Affordable Refinance Program, a component of Making Home Affordable.
60. HOA - answers> Homeowners Association
61. HOEPA - answers> Home Ownership and Equity Protections Act
62. Home Equity Line of Credit (HELOC) - answers> A home equity line of credit, or HELOC, is a line of credit that you can take from at any time during the draw period, up to your credit limit. Typically, the draw period is 10 years and the repayment period lasts 15 years.
63. HOME Investment Partnership Program (HOME Program) - answers> HUD program that provides grants to states and localities for building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people.
64. Homeowners Insurance - answers> An insurance policy that can provide coverage for damages to a dwelling and contents that belong to the homeowner. Additionally, it can offer protection to homeowners against losses resulting from liability claims from accidents occurring on the property. Homeowners insurance is mandatory for most homeowners with mortgages to obtain.
65. HOPWA - answers> Housing Opportunities for Persons with AIDS
66. Housing Choice Voucher Program (Section 8) - answers> The Housing Choice Voucher Program, commonly referred to as Section 8, is the federal government's major program fro assisting very low-income families, the elderly, and the disabled to afford decent, safe and sanitary housing in the private market. Participants are not limited to units located in subsidized housing projects and are free to choose any housing that meets program

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requirements. Housing choice vouchers are administered locally by public housing agencies, or PHAs, which receive federal funds from HUD for program administration.

67. Housing Ratio - answers> A rate that calculates a borrower's housing-related obligations as a percentage of gross monthly income. Frequently used by lenders to qualify borrowers for a mortgage. Also called a front-end ratio.
68. Imminent Default - answers> When default is reasonably foreseeable. Typically applies to borrowers who are either current or less than 60 days delinquent. With FHA mortgages, borrowers facing imminent default are defined as those who are current or less than 30 days past due on the mortgage obligation and are experiencing a hardship that prevents them from making the next payment.
69. Interest - answers> Part of a mortgage payment. Interest in the interest rate the bank charges you for borrowing their money.
70. Judgement - answers> In relation to credit, a court order mandating that a debtor pay a creditor a specified sum of money, often in collection of a debt. The record remains on a debtor's credit report for seven years whether paid or unpaid, but the negative effect is greater if unpaid.
71. Lien - answers> A legal claim against a property that secures the property as collateral if a debtor fails to meet loan obligations. Acts as a defect on the title and must be settled before transfer or ownership. The lien holder, or creditor granting the loan, releases the lien when the loan is paid in full.