The U.S. Department of Housing and Urban Development (HUD) announced on Tuesday the awarding of approximately $36 million to national, regional, and local organizations prevent foreclosures and help families and individuals with their housing needs.
HUD estimates that the money they provide in grants, combined with other funds they plan to leverage, will assist more than a million and a half individuals and families with finding housing, making more informed choices with regards to housing, and staying in their current homes.
HUD also announced the establishment of the Housing Counseling Federal Advisory Committee in order to assist consumers with the knowledge they need to find and sustain housing. The committee will consist of no more than 12 individuals with various backgrounds as appointed by HUD's secretary, according to a provision of the Dodd-Frank Wall Street Reform Act.
"Access to knowledge and information is vital to every family’s success," HUD Secretary Julián Castro said. "These grants will expand housing opportunities for families across our nation. The evidence is clear: housing counseling works. We look forward to working with our housing counseling partners to empower American families with the tools to prosper."
Housing counseling services provided by 29 national and regional organizations, six multi-state organizations, 20 State Housing Finance Agencies, and 215 local housing counseling agencies will be supported by more than $34 million of the grand money awarded by HUD. The remaining $2 million will be awarded to three national organizations to provide training for housing counselors, giving them the instruction and certification they need to assist families.
According to HUD, much of the grant money awarded to national and regional agencies is distributed to local and community-based organizations that assist low- to moderate-income individuals and families with housing needs. The larger organizations also help to improve the quality of housing counseling agencies and enhance the coordination among the providers of housing counseling.
The grant money goes toward helping families with the full range of housing needs, which may include evaluating readiness for home purchase, help the potential buyer understand downpayment and financing options, and in general navigate the buyer through the homebuying process. Grant recipients may also help families or individuals find affordable rental housing, offer financial literacy training to families with limited housing options due to credit problems, assist homeless persons in finding transitional housing until a more permanent place can be found, or assist senior citizens who are considering a home equity conversion mortgage (HECM), or reverse mortgage.
Among the many services offered by housing counseling agencies are assisting borrowers with documentation review, avoiding foreclosure scams or other predatory lending practices such as unreasonably high interest rates, inflated appraisals, or unaffordable repayment terms which would like lead to equity loss, an increase in debt, default, or foreclosure. The foreclosure prevention counseling assists homeowners who are delinquent on their mortgage loans and at risk of foreclosure by reducing expenses, negotiating with lenders and servicers, or various loss mitigation strategies.