HUD has awarded more than $42 million in housing counseling grants to hundreds of national, regional, and local organizations in order to prevent foreclosures, according to an announcement from HUD on Tuesday.
More than 1.4 million households will be assisted with the funds leveraged by HUD. The counseling that the money provides will help homeowners find housing, make more informed housing choices, or remain in their current homes if they are facing foreclosure.
The grants awarded Tuesday were announced at a White House gathering to commemorate National Homeownership Month, which is happening in June.
“Housing counselors provide potential homeowners with the tools they need to ensure they’re ready and responsible,” HUD Secretary Julián Castro said. “Their efforts give countless families a real shot at the American Dream of homeownership. The counseling organizations HUD supports are on the front lines in providing the full spectrum of services households need—from locating affordable rental housing, offering advice on how to become a homeowner, and preventing foreclosure.”
The breakdown of the $42 million awarded on Tuesday is as follows: $40 million to directly support housing counseling services provided by 31 national and regional organizations, five multi-state organizations, 17 State Housing Finance Agencies (SHFAs), and 181 local housing counseling agencies; and $2 million to four national organizations to provide housing counselors with necessary training to assist families.
“Housing counselors provide potential homeowners with the tools they need to ensure they’re ready and responsible.”
HUD Secretary Julián Castro
According to HUD, national and regional agencies distribute much of the funding from HUD’s housing counseling grants to community-based organizations that assist low- and moderate-income borrowers. Research from HUD, the Philadelphia Fed, and Urban Institute has indicated that housing counseling has substantial benefits for both first-time homebuyers and families looking to prevent foreclosure. The foreclosure prevention counseling will help homeowners who are facing delinquency or default employ strategies to avoid foreclosure such as expense reduction, negotiations with lenders or servicers, and loss mitigation.
Housing counseling agencies assist borrowers with reviewing loan documentation to avoid potential mortgage scams or other predatory lending practices such as high interest rates, inflated appraisals, or unaffordable repayment terms that can result in excessive debt, loss of equity, default, or possibly even foreclosure.