HUD Secretary Shaun Donovan announced Friday the distribution of $42 million in grants to 468 housing counseling agencies nationwide. In his announcement Friday, Donovan called housing counseling programs ""nothing less than indispensable.""[IMAGE]
After national funding for housing counseling was cut last year, Donovan said, ""We fought hard to persuade Congress to restore funding for housing counseling in HUD's budget and now we're working to make these important resources available as quickly as possible.""
While some of the funding will go to foreclosure prevention, Donovan says the funding will also target other types of housing counseling, including pre-purchase counseling to help first-time buyers assess their financial stability and prepare them for homeownership and rental counseling to help those for whom renting is a better option.
About $4 million will go to counseling for senior citizens to advise them on reverse mortgages or home equity conversion mortgages.
Because the funding will support a variety of types of counseling, Donovan says it is not targeted specifically at hard-hit markets, but instead will be distributed more broadly.
Donovan says HUD is making it a priority to distribute the funding as quickly as possible. In fact, the funding will make its way to agencies 70 percent faster than the previous year's funding.
During his announcement of the $42 million in grants, Donovan mentioned that through the recent national servicing settlement, 49 state attorneys general were granted about $2.5 billion in discretionary funds that can be used for housing counseling.
Attorneys general in Illinois and Indiana have already designated some of their funding to housing counselors, and Donovan encourages the other 47 participating attorneys general to ""follow their leads.""
He pointed out that some states, including Wisconsin, have decided to apply the funding to various holes in their state budget unrelated to housing.
HUD has found that nine of 10 struggling homeowners who receive counseling remain in their homes 18 months later. He says HUD is still developing comparable metrics for pre-purchase counseling, but he believes counseling will pay for itself over time by ensuring successful homeownership.