HUD awards over $41 million in housing counseling grants, including reverse mortgage

Some of the funds in the new award will go specifically to expanding reverse mortgage counseling availability, according to HUD

The U.S. Department of Housing and Urban Development (HUD) on Wednesday awarded over $41 million in counseling grants to agencies across the country, according to a statement released by the Department. However, this year’s award amount is lower than the general increase observed during the first year of the Biden administration.

Interestingly, HUD highlights a specific provision to use part of these grant funds to train new counselors who will serve seniors seeking Home Equity Conversion Mortgages (HECMs), the reverse mortgage program overseen by the Federal Housing Administration (FHA). To get a better idea about the impact of these latest grants and the potential to train new reverse mortgage counselors, RMD reached out to existing reverse mortgage counseling professionals and industry representatives.

The new awards

The latest round of counseling grant awards includes $38.6 million in second-year housing counseling grants that will be distributed to 173 separate local housing counseling agencies with HUD approval, along with organizations that have national, regional or multi-state reach. The awards also include state housing finance agencies which were awarded grants under HUD’s Office of Housing Counseling’s September 2021 Comprehensive Notice of Funding Opportunity (NOFO).

The office also awarded $2.75 million in second-year funding for six HUD-approved housing counseling agencies that received awards under HUD’s November 2021 NOFO for the Office of Housing Counseling Training, according to an official announcement.

Julia Gordon

“Today’s awards provide important funding for housing counseling agencies that are performing crucial services for individuals and families across the nation,” said FHA Commissioner Julia Gordon in a statement. “Maintaining and funding a network of quality housing counseling resources through our Office of Housing Counseling is a key piece of achieving HUD’s goals to reduce barriers and promote equity in housing.”

Some of the supported counseling types included in the awards are for pre-purchase homebuyers, foreclosure prevention, rental eviction prevention, disaster recovery and reverse mortgages.

“We are pleased to provide this second year of funding to support HUD-approved Housing Counseling Agencies in fulfilling their many roles, including helping families maintain housing stability as the nation recovers from the pandemic,” said Deputy Assistant Secretary for Housing Counseling David Berenbaum in an accompanying statement.

Counseling agencies will be able to continue their work as a result of these new grants, one recipient of which is Money Management International (MMI). This news is very welcome according to Jackie Boies, senior director of partner relations at Money Management International (MMI) in Stafford, Tex.

“Money Management International is extremely pleased to see $41.3 million in grants for HUD-approved providers to support housing counseling and is very appreciative of the $1.25 million awarded to our agency,” Boies told RMD. “These funds will provide housing counseling to thousands of renters and homeowners, educating and assisting them in making informed decisions about their housing options.”

Reverse mortgage counseling, expanded training

Specifically as it relates to HECM counseling, there is a specific provision under these new awards to expand the number of available counselors who can educate seniors on the specifics of a reverse mortgage before closing on a new HECM loan.

“The $2.75 million in grants awarded today under the Office of Housing Counseling Training NOFO support education and training for housing counselors, including training on delivering housing counseling services to seniors seeking reverse mortgages under the Federal Housing Administration’s Home Equity Conversion Mortgage (HECM) program and training to support successful completion of the HUD Housing Counselor Certification exam,” the announcement by HUD said.

Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA).
Steve Irwin

This is welcome news for the reverse mortgage industry according to Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA).

“NRMLA greatly appreciates the news that HUD is specifically allocating much-needed funds for the education of,  and training of,  HECM counselors,” Irwin told RMD. “Counseling is a cornerstone of the HECM program, and further educating the counseling community, expanding the pool of counselors, and developing the next generation of HECM counselors will greatly benefit those senior homeowners who may be considering the use of a HECM loan to enable their aging in place.”

In terms of how this can affect the HECM work of existing counseling agencies, Boies explains the ways in which HUD funding is utilized at MMI and why dedicated resources for reverse mortgage counseling are important.

“Specific to seniors, MMI utilizes HUD funding to offset the cost of reverse mortgage counseling,” she says. “Demand for reverse mortgage counseling remains high, as seniors tap their home equity to cover many of the pandemic-driven concerns, such as loss of employment and unexpected medical expenses.”

Also encouraged by this news is GreenPath Financial Wellness, which also offers HECM counseling.

“This funding allows GreenPath to continue to serve seniors at all points in the reverse mortgage lifecycle,” said Jennifer Fraser, director of stakeholder engagement at GreenPath. “These dollars allow us to assist clients who may not have the strongest financial position without adding additional burden on an often already stressed fixed income.”

Application of reverse counseling funding

At MMI, Boies explains that this funding will help go to critical services including reverse mortgage default counseling, which is free to the client. The economic pressures of inflation could also be combining uniquely for seniors, she says.

“With rising property values, some seniors are experiencing increases in property taxes and insurance,” she explains. “Added to the continuously rising cost of essentials like groceries, gasoline and utilities, many of the seniors we are counseling advise they are struggling to make ends meet. These struggles leave more reverse mortgage borrowers at risk of default, making the availability of reverse mortgage default counseling vital to sustainable housing.”

That is why this new funding comes at an “opportune” time for MMI, Boies says, since the agency is in the midst of hiring an additional 8-10 counselors for different kinds of counseling.

“As demand for housing counseling continues to rise and the time required to hire, train and certify counselors to provide those services increases, we’re seeking to proactively grow our team to remain positioned to meet the needs of consumers,” she explains.

Read the announcement of the new counseling awards at HUD.

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