How HUD’s Counseling Services Can Help Homeowners and Home Buyers

Buying and owning a home is a daunting prospect in the best of times – and the uncertain climate of the economy due to COVID-19 can make it feel downright unachievable. The good news is that there are professionals trained to help you navigate your home related worries. Acting Federal Housing Commissioner Len Wolfson said in a statement, to the U.S. Department of Housing and Urban Development (HUD),  “In the midst of the COVID-19 pandemic, HUD-approved counselors are there to assist millions of homeowners and renters nationwide and help them keep a roof over their heads.”

Homeowners and potential homebuyers looking for guidance amidst the uncertainty can benefit from the $40 million in housing counseling grants awarded by HUD on June 16th. HUD notes these grants, “Will directly support the housing counseling services provided by the 204 HUD-approved local housing counseling agencies, national and regional organizations and housing finance agencies (SHFAs).”

A housing counselor is an individual certified through The HUD Housing Counseling Certification Examination who can help potential homebuyers understand the buying process, help current homeowners understand how to avoid foreclosure, and help seniors and individuals with disabilities make sound decisions about their monthly payments, among other things.

According to HUD, “In Fiscal Year 2019, HUD-approved housing counseling agencies served 1,015,911 households. Approximately 52 percent of those households were minorities, including 38 percent African American and 10 percent identified as multiple races. Additionally, 19 percent of households served were Hispanic.”

The latest grants were given preferentially to local counseling agencies serving individuals in designated Opportunity Zones, or “economically distressed communities.”

While there are a variety of services offered through HUD’s Housing Counseling Program, not all of them are free. Housing counseling agencies who participate in HUD’s Housing Counseling Program are not permitted to charge a fee for:

• Foreclosure prevention: There are a variety of programs administered through HUD for homeowners who are at risk of foreclosure or struggling with their mortgage payments. A complete list of these programs can be found on HUD’s website.
• Homeless counseling: HUD funds services to help individuals transition out of homelessness.

Housing counseling agencies are permitted to charge reasonable fees for other services such as:

• Pre-purchase education: HUD’s counseling services can help potential homebuyers understand how much they can afford, know their rights, shop for a loan, find homebuying programs, and walk them through the entire homebuying process from making a wish list to signing the closing papers.
• Reverse mortgage counseling: This service focuses on educating seniors about the viability of a reverse mortgage.
• Non-delinquency post-purchase counseling services
• Education to avoid mortgage scams

It’s important to make sure you’re using a HUD-approved agency to access these services. The National Association of REALTORS’® Protect Your Investment: A Guide For At Risk Homeowners urges people to: “Watch out for questionable companies who advertise that, for a minimal fee, they will assist homeowners by hiring a lawyer to defend the foreclosure in court or negotiate lender assistance on the borrowers’ behalf. You should contact a HUD-approved counseling organization before you pay or sign anything.”

If you demonstrate that you can’t afford the fees, the agency is required to waive the fee. HUD also requires all housing counseling agencies to provide an upfront explanation of their fee structure and the fee must be proportional to the service provided. If you feel a housing agency is not complying with these regulations you can contact HUD’s Office of Housing and Counseling.

After gathering your basic financial and loan information – including mortgage statements, other monthly debt payments, and income details – you can find a HUD-approved agency in a variety of ways.

• Online: Using HUD’s approved housing counseling agencies search tool you can find an agency by state. You can narrow your search by searching specifically for a foreclosure avoidance counselor or a reverse mortgage counselor.
• By phone: You can access foreclosure advice from housing experts any time of day by calling (888) 955-HOPE (4673).
• Through the app: The free app, available for iPhone or iPad, offers contact information for approved agencies sorted by location and language.

HUD’s counseling services are a great resource for homeowners and homebuyers who are looking to educate themselves and make responsible choices in their pursuit of homeownership.