No matter how long you have been doing HECM counseling, the HUD HECM exam requires preparation. In order to pass the exam, you need to:
Know the material
Understand how the program works
Apply analytical thinking skills to the material
Read the questions carefully, and
Answer the question that is being asked.
Good reading comprehension is key. You will need to get a minimum score of 80 out of 100 in order to successfully complete the exam. You are not REQUIRED to have satisfied the HECM Counseling Roster HECM training requirement before taking the exam. However, unless you have previous HECM counseling experience, you are STRONGLY ENCOURAGED to do so.
After completing HECM training, you should plan on several weeks of study - at a minimum - to prepare for the exam. You will be taking the exam online from your home or office, but you will not have access to any notes, books or other materials during the exam.
Start by reviewing the study materials below. Then take the sample exam which is available online. The sample exam is available at no cost. You are permitted to take the exam up to three times. The sample exam will provide you with information on where to learn more about the topics for questions that you did not answer correctly.
The HUD HECM Counseling Protocol is the document that outlines much of the information that counselors need to know and cover in counseling (but not everything that is on the exam). It was most recently updated in 2010, though, and does not include program changes since that time. A new version is in process.
HUD Handbook 4235.1 REV-1 Home Equity Conversion Mortgages, is the basic program handbook for the HECM program. The key sections are Chapters 1-9 and Appendixes 1, 7, 8, and 13. Remember - the Handbook was published in 1994, and some of the key program rules have changed since then, as explained in later HUD mortgagee letters, HECM regulations, and amendments to the HECM statute (see below). BE SURE TO READ THE MORTGAGEE LETTERS! A new version of the Handbook is in process and may be issued in late 2015.
HUD Handbook 4330.1 Administration of Insured Mortgages, Chapter 13 addresses servicing requirements for HECMs.
HUD HECM Mortgagee Letters are issued by HUD to make official changes in the HECM program. This is the way the program is updated and rules are clarified or modified. Reading and digesting the Mortgagee Letters is critical for a thorough understanding of how the HECM program works and how it is changing. Concentrate on the ones from 2009 forward, since earlier ones have been incorporated into the Protocol. See the Overview of Key Mortgagee Letters document below for an unofficial summary of the most important mortgagee letters.
HO111 Introduction to Home Equity Conversion Mortgages Training Manual: HO111 is a 5-day introductory HECM counselor training offered through NeighborWorks America. This is the manual for HO111, updated in March 2015. It is the most comprehensive and updated information source for HECM counselors. It includes a wealth of information and references and incorporates relevant information from Mortgagee Letters up to that point. If you took HO111 previously, but haven't taken the exam yet, get the latest update here.
FAQ Document on the HECM Counseling Certificate (updated 2015)
Technical Topics: These specialized briefings provide detailed information for HECM counselors on these key topics.
Overview of Key HUD Mortgagee Letters about HECM (through 2015-09)
Social Security Administration Program Circular (2004) discusses how home equity conversion programs, including reverse mortgages, sale-leasebacks, DPLs, and property tax deferrals, may affect SSI benefits.
Fast Facts on HECM Interest Rates (updated 2015)