Housing counseling

What is Housing Counseling?

 A certified housing counselor is a person specially trained to assist individuals and households with their financial matters. Housing counselors can assist in the areas of buying, preventing foreclosure, and refinancing homes.

Housing Counseling subject matter can include budgeting, savings, spending, debt, and credit. Unlike servicers, loan officers, brokers or other real estate professional representatives, a housing counselor offers independent advisement.  Housing counseling services are generally offered with nominal or no cost to the client. Most agencies are supported by HUD and state housing finance agencies, local governments, as well a private philanthropy. Foreclosure counseling and counseling services for homeless persons are offered free of charge through HUD’s Housing Counseling Program.  

Many homebuying down payment and closing cost assistance programs require a Homeownership Counseling Certificate from an approved agency before making an offer on a home. A certificate requires in-person or on-line group home buyer education and a one on one counseling session with a counselor to discuss a person’s particular circumstance. Certificates are good for one year.

"Counselors are trained to help in a variety of situations – from giving advice to someone who's exploring homeownership for the first time, to helping a future homeowner overcome past credit problems (or lack of any credit history at all)" ("Freddie Mac Encourages Homebuyers to Utilize Housing Counselors", DSNews.com, )

“Evidence indicates that housing counseling can be an effective intervention in helping distressed homeowners avoid foreclosure.” A report by Temkin et al. (2014) sponsored by the Urban Institute reviewed outcomes associated with 240,000 loans, one-half of which received counseling under NeighborWorks® America’s National Foreclosure Mitigation Counseling (NFMC) program. Counseled clients were 2.83 times more likely to receive a loan modification and were 70 percent less likely to redefault on a modified loan. Counseled clients were given modifications that saved them $732 per year compared with non-counseled borrowers.  From Housing Counseling Works, Marina L. Myhre, Ph.D. Nicole Elsasser Watson Social Science Analysts U.S. Department of Housing and Urban Development 2017

In June 2016, HUD published The First-Time Homebuyer Education and Counseling Demonstration: Early Insights report that presented 12-month findings for study participants. Three of four 12-month outcomes tested positive and statistically significant (improved mortgage literacy, greater appreciation for communication with lenders, and improved underwriting qualifications)