More Year Round Homeownership Counseling Sought

HUD granted more than $40 million to 334 regional and local housing counseling organizations that promote financial literacy. Credit: © Jeanette Dietl - Fotolia.com

The foreclosure crisis has put the spotlight on homeownership education, pointing to a pressing need to provide home-ownership counseling year round.

Educational efforts that focus on helping home seekers understand all of their housing options are not limited to the National Homeownership Month in June, said deputy assistant secretary of HUD’s office of housing counseling, Sarah Gerecke.

As the economy recovers and the housing market improves, the national network of HUD-approved nonprofits that provide housing counseling will focus on financial education for first-time homebuyers, she said. The extension of the Making Home Affordable Program through 2015 and other federal measures are expected to help.

Earlier in June HUD granted more than $40 million to 334 regional and local housing counseling organizations that promote financial literacy. Combined with additional funding, these grants are expected to assist more than 1.6 million households. More specifically, over $38 million in grant funds will directly support the housing counseling services provided by 27 national and regional organizations, eight multistate organizations, 22 state housing finance agencies and 277 local housing counseling agencies. HUD’s new mobile app allows smartphone and tablet users to locate housing counselors in their own area.

Another $2 million is earmarked for two national organizations that train and certify housing counselors. HUD’s new Office of Housing Counseling helped streamline the grant application process to facilitate participation for all the HUD-approved counseling organizations.

The housing commission of the Bipartisan Policy Center also stressed in a recent report that “housing counseling can improve prospective borrowers’ access to affordable, prudent mortgage loans, especially for families that otherwise might not qualify.”

Assessments are based on findings from several studies released over the past year that have shown first-time homebuyers who receive pre-purchase housing counseling are 29% less likely to become seriously delinquent.

Meanwhile, housing counseling nonprofits are updating their strategies.

NeighborWorks America CEO Eileen Fitzgerald recently called credit unions the natural partners of nonprofit community development corporations in their efforts to keep homebuyers informed about the short and long-term benefits of counseling. In her remarks at the National Federation of Community Development Credit Unions conference in Baltimore, she suggested they work together.

In other news related to aiding first-time homebuyers, recently the Independent Community Bankers of America applauded the CFPB’s amendments to ability-to-repay in an effort “to minimize the negative impact” on QM rules, helping “preserve access to mortgage credit,” said Bill Loving, ICBA chairman and president. Loving called on legislators “to go further to adequately protect...sound mortgage loans.”