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HUD: With Budget Sequester, Housing Counseling Will Have New Battle

Potential sequestration as a result of the budget crisis in Washington will have a damaging effect on families in part resulting from less funding for housing counseling programs, Department of Housing and Urban Development Secretary Shaun Donovan said this week in prepared testimony before the Senate Committee on Appropriations. 

The “sequester” would play out as across-the-board budget cuts beginning in March barring a deficit reduction agreement in Washington. Those cuts would impact programs including both defense and non-defense spending, spanning HUD’s interests, such as housing counseling.

“From HUD’s perspective, the March 1 sequestration would also have even broader harmful effects on middle class families, on communities, and on the economy across the nation. Specifically: Sequestration would result in 75,000 fewer households receiving foreclosure prevention, pre-purchase, rental or other counseling though HUD housing counseling grants,” Donovan said. 

The sequestration being considered to go into effect in March across many sectors of the government have been argued against by President Obama, who said they will cost the country jobs and will slow down the economic recovery. 

Housing counseling programs, including reverse mortgage counseling, have seen an uphill funding battle in recent months, despite the fact that housing counseling has been strongly utilized as a result of the housing crisis. 

“Distressed households who receive counseling are more likely to avoid foreclosure, while families who receive counseling before they purchase a home are less likely to become delinquent on their mortgages,” Donovan said. 

Written by Elizabeth Ecker

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