Housing Counselor Certification (HUD) Practice Exam

If a client had previously owned a home but sold it five years ago, would they qualify as a first-time homebuyer?

1. Yes, because they have not owned a home in the last three years

2. No, because they have previously owned a home

3. Yes, if they meet income requirements

4. No, unless they were displaced

The correct answer is: No, because they have previously owned a home

A first-time homebuyer is generally defined as an individual who has not owned a home in the past three years. This definition allows those who have owned homes in the past to qualify again as first-time homebuyers if sufficient time has passed since their last home purchase. Since the client sold their home five years ago, they indeed fit the criteria for a first-time homebuyer, as the time frame exceeds the three-year requirement. The response indicating that they would not qualify simply because they have previously owned a home overlooks this important aspect of the definition. It is crucial to understand that prior homeownership alone does not disqualify someone from being considered a first-time homebuyer under the correct time restrictions. This is a key piece of knowledge for housing counselors, as it directly affects eligibility for various assistance programs and options available to new buyers.