$14M Granted by HUD for Housing Counseling Services

This week, the U.S. Department of Housing and Urban Development (HUD) Massachusetts announced the allocation of more than $14 million in counseling grants, which are set to be distributed to various agencies nationwide. The announcement was made via a HUD press release, and it’s important to note that the total grant amount for this year is lower than what was recorded between 2019 and 2022.

The goal of these awards is to enhance the range and quality of housing counseling services offered by grantees to various demographics, including homebuyers, homeowners, and renters. Furthermore, the grants will facilitate the continuation of initiatives that began in 2021, aimed at aiding underserved communities. This will be accomplished through collaborative efforts involving HUD-approved housing counseling agencies, historically Black colleges and universities (HBCUs), and other minority-serving institutions (MSIs).

According to HUD, the counseling work carried out is a vital part of the homeownership journey, as the counselors provide invaluable services to homeowners, prospective homeowners, and renters. HUD Secretary Marcia Fudge emphasized the transformative power of homeownership, which she stated, “is the primary way most people in this country build wealth. It has the power to transform not only your life but the lives of your family members.” Fudge also underscored the importance of housing counseling services in ensuring individuals have the necessary tools to buy and maintain their dream homes.

Expressing similar sentiments, Federal Housing Administration (FHA) Commissioner Julia Gordon underscored the indispensable educational value offered by housing counseling, adding that these grants facilitate access to these services for households nationwide, especially for those facing systemic barriers and racial inequities in securing safe and affordable housing.

David Berenbaum, Deputy Assistant Secretary for Housing Counseling, expanded on the impacts of housing counseling by stating that it affects several stages of the homeownership process. He went on to highlight the essential resources provided by the HUD-approved housing counseling agencies, such as pre-purchase homebuying information, foreclosure and rental eviction prevention, senior-friendly mortgage options, and disaster recovery counseling.

Of the agencies receiving the grants, those offering services for home equity conversion mortgage (HECM) clients, such as Money Management International (MMI), have commended the announcement. Jackie Boies, Senior Director of Partner Relations at MMI, said, “Specific to seniors, MMI utilizes HUD funding to offset the cost of reverse mortgage counseling.” Boies explained that, although interest rates have been on the rise, the demand for reverse mortgage counseling remains steady.

Interestingly, while the demand for refinancing has seen a decline, MMI has noted an increase in HECM for Purchase (H4P) sessions, a sign that seniors are exploring innovative ways to navigate today’s housing market.

Furthermore, counselors have been utilizing HUD funds to provide free counseling services to reverse mortgage borrowers at risk of default, with MMI being an active participant in this endeavor. Boies emphasized that this kind of support is essential given the increased financial strain many seniors are facing due to the rising costs of property taxes, insurance, and basic living expenses.

It is worth noting that this year’s total allocation of about $14.4 million in grants for 180 different counseling agencies is considerably lower compared to recent years. In mid-2022, HUD had distributed over $41 million in counseling grants, while early 2022 saw an allocation of $51.4 million. These funds were directed toward supporting vulnerable communities, communities of color, and those adversely impacted by the COVID-19 pandemic.

In addition, similar grant amounts were disbursed in fall 2021, and there were two disbursements of $43 million each in 2019. These figures demonstrate a noticeable decrease in the current year’s grant allocation, raising questions about future funding for housing counseling services.