HUD Awards $40 Million in Counseling Funding Including Reverse Mortgages

The Department of Housing and Urban Development today announced $40 million in funding awards to housing counseling agencies and intermediaries nationwide, including funding for reverse mortgage counseling. 

The agency recently changed the way it allocates funds to include all counseling funding under a single grant rather than separating reverse mortgage counseling funds. The grants, totaling more than $40 million, were awarded to 334 counseling providers with the aim to help more than 1.6 million households.  

“Make no mistake: these grants will do a lot of good,” said HUD Secretary Shaun Donovan. “The HUD-approved counseling agencies this funding supports are crucial in helping families manage their money, navigate the homebuying process, and secure their financial futures. The evidence is clear that housing counseling works. These grants are a smart investment to help families and individuals find and keep housing which helps promote neighborhood stability in the long term.”

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Among the funding, roughly $38 million will directly support counseling services while $2 million will go toward training housing counselors. Working through HUD’s newly launched Office of Housing Counseling, the funding allocation was streamlined this year to reduce the administrative burden on applicants, HUD said. 

View the allocations by state and by agency.

Written by Elizabeth Ecker

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  • Doing the math this is an average of about $113,772 each for counseling itself. No doubt, HUD sprinkles on some agencies and rains on others but one must question how far these dollars will stretch in light of the continuing financial problems many homeowners find themselves in.

    • Hi Cynic,
      Unfortunately it does not average out to that, the 40 million is for *all* types of housing counseling, not just HECM counseling and spread across a vast number of agencies. In addition to the 334 direct HUD recipients (one of which is the Local HUD Housing Counseling agency that I am proud to work for), there are many of those agencies who are national and/or regionals who have sub-agencies beneath them. Further, we can see hundreds to thousands of people each year on various aspects of housing counseling from foreclosure prevention, to evictions, to homelessness prevention, to first time purchasers, etc. $40 million is a drop in an increasingly large ocean.
      The average small agency seems to be getting less than $20,000 from HUD (rather than $113,772) just to keep its doors open. That is not enough to pay even one full time employee here in Massachusetts. We need to seek our continuation grants elsewhere. I shudder to think what the sub-agencies are getting when they are under someone else’s umbrella.
      Frank J. Kautz, II
      Staff Attorney
      Community Service Network, Inc.
      52 Broadway
      Stoneham, MA 02180
      (781) 438-1977
      (781) 438-6037 fax
      FrankKautz@csninc.org –work
      Frank@Kautzlaw.com –private

      • Hey Frank,

        Good to see you participating again.

        As to agencies receiving different amounts of grants, the idea of raining on some and sprinkling on others seemed to have covered that.

        As to all types of HUD related counseling being covered on the grants, I thought the article made that plain when Elizabeth wrote: “… it allocates funds to include all counseling funding under a single grant rather than separating reverse mortgage counseling funds.”

        Your point about far more than 334 agencies benefiting from the grant is well taken.

        Of course, one wonders if not only HECM default counseling is included in the grants as well as HECM pre-closing counseling. Combining all (forward as well as HECM) grant allocations into one grant per agency leaves one wondering about how much is allocated by the agencies to HECM counseling and how they account for it.

      • Hi Cynic,
        Not every agency does everything, so allocating the grants becomes a bit difficult. My agency does just about everything (we do not do HECM default counseling – we could, but HUD is still keeping that with a few agencies) and we get a whopping $13k. Now, we are a very small agency and, as the staff attorney, I do the lion’s share of the work. I can tell you that the average HECM counseling, from the time the person calls until the final follow-up takes about 3 to 3 1/2 hours. The average foreclosure prevention counseling, if we do no more than advise the client, takes 7 to 8 hours; and if we get fully involved can take as much as 35 to 60 hours on a per case basis. Rental issues can be as short as a phone call (no, we don’t have money to pay your rent ad infinitum, nor does anyone else), to weeks worth of work if it goes to court. First time homebuyer classes run around 14 hours to prepare and teach, and first time homebuyers can be anywhere from 2 hours to 10 hours to help get ready.
        So, as you can see, time-wise HECMs are probably the easiest thing that I do. I do approximately a hundred and twenty or so HECMs a year. I may see well over 350 clients a year. In my case, allocating the HECM clients is fairly easy. However, doing it across the board for HUD would be more difficult.
        Frank J. Kautz, II
        Staff Attorney
        Community Service Network, Inc.
        52 Broadway
        Stoneham, MA 02180
        (781) 438-1977
        (781) 438-6037 fax
        FrankKautz@csninc.org –work
        Frank@Kautzlaw.com –private

  • Per Elizabeth Ecker, RMD, 2012 saw HUD endorsing 365,205 of which 12,079 were HECMS. That means that HECM’s account for 3.3 percent of total HUD mortgage volume, which means that $1.254 million of the $38 million is available for HECM counseling.
    3.3 percent of HUD mortgage volume is a pretty small part of the insuring equation and, of course, the consumer will inevitably continue to pay $125 for the counseling.

  • After perusing HUD’s 2012 Management Report I have discovered that HUD insured 1,216,936 mortgages in 2012 of which 54,676 were HECMs. That is 4.5 percent of total volume.

    Also in the report, HUD has insured 779,000 HECMs since inception in 1989.

    115,000 in 2009 was the peak vs 54,676 in 2012…

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