President Trump’s budget request for the Department of Housing and Urban Development showed a dedication to the reverse mortgage program — but a cut in housing counseling spending.
The proposed fiscal year 2019 HUD spending plan would set aside $45 million for the Housing Counseling Program, a drop of $9.6 million or about 18% from the annualized amount for 2018.
“Funding at this level will permit the Office of Housing Counseling to meet almost 950,000 consumers’ needs; to improve their housing quality and affordability through budgeting, saving, use of credit, and understanding the rights and responsibilities of homeownership and tenancy,” the proposed budget reads.
Of the total, $38.5 million would be spent on housing counseling programs, with the exact amounts determined “competitively.” Counselor training programs would receive $2 million in funding, with the remaining $4.5 dedicated to internal improvements to the OHC — including an effort to “increase consumer and real estate professionals’ awareness of the program.”
Last July, HUD doled out $50.6 million in counseling grants, and the fiscal 2018 request called for $47 million in funding, a number equal to the annualized 2017 amount. That $47 million figure was good enough to provide counseling to nearly 1.2 million Americans, HUD said at the time.
HUD secretary Ben Carson has placed specific emphasis on counseling programs in his public comments about the future of the department; last June, he bemoaned the loss of general knowledge about homeownership and mortgage among the general population.
While the counseling budget doesn’t separate out forward and reverse mortgage programs, agencies have already begun to see a steep drop-off in demand for Home Equity Conversion Mortgage counseling services in recent months. Once the industry handled the surge of borrowers looking to secure loans before reductions in principal limit factors on October 2, interest dried up.
“Borrowers are qualifying for less money, and initial fees are higher than they once were,” Cambridge Credit Counseling Corp. housing director Jennifer Cosentini told RMD earlier this month. “This makes the product less appealing to many, and is causing a higher cancellation rate for us.”
Written by Alex Spanko
