The Department of Housing and Urban Development will grant $40 million to housing counseling via funds restored by Congress for the fiscal year 2012. HUD said the grants will be made competitively to hundreds of programs and state housing finance agencies across the countries. Roughly $36 million will be used for helping homeowners avoid foreclosure, thwarting mortgage scams and teaching buyers how to purchase or rent a home. Another $4 million will be used for reverse mortgage counselors. Republicans led Congress to slash $88 million that HUD would have granted to housing counselors during a budget compromise fashioned in April. In November, Congress restored some of the funds in a minibus spending bill that also raised the conforming loan limits for the Federal Housing Administration. "We fought hard to persuade Congress to restore funding for housing counseling in HUD’s Fiscal Year 2012 budget and I’m pleased that they did so," HUD Secretary Shaun Donovan said Thursday. "We will now work to make these important resources available to help families as quickly as possible." HUD and several industry trade groups pushed hard to restore the funding. Even the Mortgage Bankers Associations asked Congress in September to restore the grants given the continued struggles with foreclosure and the rise of loan modification scams. "Housing counseling has been proven to make a significant difference to consumers, often allowing them to avoid foreclosure and the associated life disruptions," said a spokesperson for the National Foundation for Credit Counseling. "The NFCC applauds Congress for recognizing the importance of housing counseling by restoring the funding and encourages consumers to not delay reaching out for help to a legitimate, HUD-approved housing counseling agency." The funds for reverse mortgages are also important considering a borrower is required to have HUD-approved counseling before taking out a home equity conversion mortgage backed by the government. "We are glad to see that Congress was able to agree on a compromise and provide a significant level of funding for housing counseling," said Peter Bell, president of the National Reverse Mortgage Lenders Association. "Now we have the challenge of assuring that HUD will allocate an adequate proportion of the funding for mandatory reverse mortgage counseling." Write to Jon Prior. Follow him on Twitter @JonAPrior.