HUD awards $14M in housing counseling grants

The grants are expected to assist 180 housing counseling agencies to continue their work, including for HECM counseling

The U.S. Department of Housing and Urban Development (HUD) awarded over $14 million in counseling grants this week to agencies across the country, according to a statement released by HUD. This total amount is lower than what was observed between 2019 and 2022.

The awards will support “the comprehensive housing counseling services provided by grantees to homebuyers, homeowners, and renters,” according to HUD. It will also help fund the work that began in 2021 to help underserved communities through partnerships between HUD-approved housing counseling agencies, historically Black colleges and universities (HBCUs), and other minority serving institutions (MSIs).

Counseling work

HUD personnel noted the importance of housing counseling for the homeownership process, along with the work that counselors engage in.

HUD Secretary Marcia Fudge, who oversees the department that administrates the reverse mortgage program for the Biden administration.
Marcia Fudge

“Homeownership 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,” said HUD Secretary Marcia Fudge in a statement. “Housing counseling services help ensure current and prospective homeowners have all the tools they need to purchase and maintain the homes of their dreams.”

Federal Housing Administration (FHA) Commissioner Julia Gordon added that the educational value provided by housing counseling is difficult to replicate.

“These awards help to ensure that households across the country have access to high-quality housing counseling services, particularly those for whom systemic barriers and racial inequities have made it difficult to obtain safe and affordable housing,” she said.

Housing counseling impacts several levels of the homeownership process, according to David Berenbaum, deputy assistant secretary for housing counseling.

“We are pleased to fund these HUD-approved housing counseling agencies that offer vital resources to consumers, including pre-purchase homebuying information, foreclosure and rental eviction prevention, mortgage options for seniors seeking to age-in-place, and disaster recovery counseling,” Berenbaum said.

Reverse mortgage impacts

The housing counseling agencies that provide services for home equity conversion mortgage (HECM) clients lauded the announcement, including Money Management International (MMI).

“Specific to seniors, MMI utilizes HUD funding to offset the cost of reverse mortgage counseling,” Jackie Boies, senior director of partner relations of MMI, said. “Despite higher interest rates, the demand for reverse mortgage counseling remains steady. Seniors continue to tap into their home equity to cover the rising cost of basic living expenses; however, post-pandemic at MMI, we’ve seen more seniors tapping their equity for home repairs or modifications and paying off debt.”

Refi demand has tanked recently, but MMI has seen an uptick in HECM for Purchase (H4P) sessions, Boies said.

“[This indicates] that some seniors are finding creative ways to purchase in today’s housing market,” she said.

Counselors also use HUD funds to offer free counseling to reverse mortgage borrowers in danger of default. MMI participates in this, Boies said.

“The demand for default counseling has remained steady,” she said. “Many seniors continue to struggle with increases in property taxes and insurance, plus the rising cost of basic living expenses, [which] places more reverse mortgage borrowers at risk of default. These concerns make the availability of free reverse mortgage default counseling vital to helping seniors remain in their homes.”

HUD funding “remains essential” to supporting reverse mortgage counseling efforts, she added.

A lower total

A total of about $14.4 million in grants for 180 different counseling agencies is lower compared to recent years. HUD awarded over $41 million in counseling grants to agencies across the country in mid-2022. That round of funding included a specific provision to use a portion of the funds to train new HECM counselors.

In early 2022, HUD awarded $51.4 million in grants to 177 HUD-approved counseling agencies, which were designed to support vulnerable communities, communities of color and those negatively impacted by COVID-19.

The $51 million figure was also disbursed to agencies in the fall of 2021, an increase from the $40 million in counseling grants to agencies issued in mid-2020. Another $43 million in housing counseling grants were issued to agencies twice in 2019, in June and October.

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