Boost in Funds for Mortgage Counseling
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- Kara Johnson | December 28, 2010
Nearly $73 million in housing counseling grants have been awarded by the Department of Housing and Urban Development (HUD), with the goal of helping families become first-time homeowners and avoid foreclosure.
The total represents a 22 percent increase over last years’ funding level of $60 million. The grants will be distributed among more than 500 nonprofit housing agencies nationwide.
"These organizations are on the front lines of helping families who are desperate to remain in their homes," said HUD Secretary Shaun Donovan, in announcing the grants. "Now, more than ever, it’s crucial that we support these agencies that are working with struggling families on a one-to-one basis to manage their money, navigate the homebuying process,and secure their financial futures."
The grants will fund counseling services designed to help low- and moderate-income persons navigate the process of buying a first home and make informed choices in doing so. Counseling is designed to help new borrowers understand the mortgage process, evaluate their readiness to buy a home and obtain mortgages that are affordable and sustainable, and therefore reduce the long-term risk of foreclosure.
Nearly $10 million of the total will be allocated for assistance for senior citizens interested in obtaining reverse mortgages, formally known as Home Equity Conversion Mortgages (HECMs). Such loans are an increasingly popular way for seniors to borrow against their home equity to pay for medical costs, living expenses and other needs, but can come with unexpected expenses and pitfalls. The counseling services are designed to help potential borrowers understand how such loans work and evaluate their options.
The grants will also fund anti-foreclosure programs and financial literacy training for consumers.
Approximately $68 million of the total will go to directly support housing counseling services, with $5 million set aside to three national organizations for training an additional 4,500 new housing counselors.
Grants are awarded to HUD-approved agencies through a competitive bidding process. A full list of all grant awardees and summary descriptions of all grants are available on the HUD web site, www.HUD.gov.
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