In an ongoing effort to improve housing education for consumers, the U.S. Department of Housing and Urban Development (HUD) announced it has awarded $40 million in grants to hundreds of national, regional, and local organizations to bolster housing counseling programs. The government agency said the money will go "to help families and individuals with their housing needs and to prevent future foreclosures."
HUD projects the housing grants will help assist more than 1.5 million households find housing, keep their current homes, and make more informed housing choices.
"These grants are an essential tool to help families find suitable housing or to keep the homes they have," said HUD Secretary Shaun Donovan. "HUD-approved counseling agencies use this funding to support a wide range of services from assisting lower income persons to locate an affordable apartment to helping first-time homebuyers avoid unsustainable mortgages."
HUD released two studies on the impact of HUD-approved housing counseling in 2012. The two studies looked at first-time homebuyers, as well as those struggling to prevent foreclosures. In both studies, the government body found housing counseling "significantly improved the likelihood homeowners remained in their homes."
Of the allotted $40 million, more than $38 million will directly support the housing counseling services provided by 29 national and regional organizations, seven multi-state organizations, 22 State Housing Finance Agencies, and 232 local housing counseling agencies.
The remaining $2 million is earmarked for the training of housing counselors, providing instruction and the necessary certifications to effectively assist families with their housing needs.
"Grant recipients utilize funding to address the full range of families' housing counseling needs. This includes helping homebuyers and homeowners realistically evaluate their readiness for a home purchase, understand their financing and downpayment options, and navigate what can be an extremely confusing and difficult process," HUD said.
Furthermore, the agency believes that counseling can help support fair housing by assisting borrowers in reviewing their loan documentation to avoid potential mortgage scams, unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure.