HUD Offers $50 Million in Housing Counseling Grants

Hundreds of thousands of American families will have a greater opportunity to find housing or keep the homes they have because of $50 million in housing counseling and counseling training grants offered by the U.S. Department of Housing and Urban Development.

The organizations that provide housing counseling services help people become or remain homeowners or find rental housing and assist homeless persons in finding the transitional housing they need to move toward a permanent place to live. Grant recipients also help homebuyers and homeowners realistically evaluate their readiness for a home purchase, understand their financing and downpayment options and navigate what can be an extremely confusing and difficult process.

In addition, grantees help combat predatory lending by helping unwary borrowers avoid unreasonably high interest rates, inflated appraisals, unaffordable repayment terms and other conditions that can result in a loss of equity, increased debt, default and even foreclosure.

Likewise, foreclosure prevention counseling helps homeowners facing delinquency or default employ strategies, including expense reduction, negotiation with lenders and loan servicers and loss mitigation, to avoid foreclosure. According to HUD secretary Steve Preston, the housing counseling grants will assist families in becoming first-time homeowners and remaining homeowners after their purchase. HUD-approved counseling agencies not only provide homeownership counseling but also offer financial literacy training to renters and homeless individuals and families.

"These critical counseling grants not only help to put people into homes, but they help to keep them there as well," said Mr. Preston. "Housing counseling organizations will continue to help families make more informed choices before they purchase a home and counsel families facing foreclosure. It is critical that Americans better understand how to manage their money, navigate the homebuying process and securing their financial future."

Since 2001, HUD has increased funding to 2,300 approved housing counseling agencies by 150 percent. More than $47 million will support 21 national and regional organizations and 376 state and local housing counseling agencies. In addition, HUD is awarding $3 million to two national organizations to train approximately 2,600 counselors who will receive the instruction and certification necessary to effectively assist families with their housing needs.

National and regional agencies distribute much of HUD's housing counseling grant funding to community-based grassroots organizations that provide advice and guidance to low- and moderate-income families seeking to improve their housing conditions. In addition, these larger organizations help improve the quality of housing counseling services and enhance coordination among other counseling providers.

According to HUD, counseling agencies will use $4 million to help assist senior citizens seeking reverse mortgages or Home Equity Conversion Mortgages. These agencies will provide counseling for the rapidly growing number of elderly homeowners who seek to convert equity in their homes into income that can be used to pay for home improvements, medical costs and other living expenses.

HUD awards annual grants under the housing counseling program through a competitive process. Organizations that apply for grants must be HUD-approved and are subject to biennial performance reviews to maintain their HUD-approved status.