HUD released a proposed rule, “Housing Counseling Program: New Certification Requirements,” on September 13. The proposed rule seeks to address changes made to the HUD housing counseling program made under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). HUD’s most recent housing counseling Notice of Funding Availability (NOFA) began to address the Dodd-Frank changes and alluded to the forthcoming proposed rule. Comments on the proposed rule are due on or before November 12.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) made changes to the current HUD housing counseling program. These changes included a new requirement that all HUD-related homeownership counseling and rental housing counseling, provided in connection with any HUD program, are to be administered only by HUD-certified housing counseling agencies through their HUD-certified housing counselors.
Dodd-Frank prohibits HUD housing counseling funds to go to a housing counseling agency unless “individuals through which the agency provides counseling, has been certified by HUD as competent to provide counseling.” The law also established a new Office of Housing Counseling within HUD to strengthen oversight and administration over housing counseling services provided through HUD’s housing counseling program. The law prohibits agencies that have been convicted for offenses such as election fraud, voter intimidation and voter suppression from receiving housing counseling funds. The law also establishes new guidelines about the misuse of grant funds. Once an agency is found to have misused housing counseling funds, the funds must be reimbursed to HUD within 12 months and specifies that the agency will not be eligible to receive housing counseling funds in the future. HUD notes that while the terms HUD-approved and HUD-certified are considered interchangeable for purposes related to the proposed rule.
Under the proposed rule, rental housing counseling is defined as “counseling related to rental of residential property, which may include counseling regarding homeownership opportunities and providing referrals for renters and prospective renters to entities providing counseling.” Rental housing counseling is defined as counseling related to the following topics and programs:
- Tenant-based assistance and affordable housing assisted under the HOME program in the context of eligible activities under the Community Development Block Grant program
- The Public Housing Operating Fund
- Displacement due to demolition and disposition of public housing
- The Family Self-Sufficiency program
- Public housing resident homeownership programs
- Conversion of distressed public housing to tenant-based assistance
- Hope for Public Housing homeownership grants
- Activities in connection with community housing development organizations’ set-asides from HOME technical assistance funds
- Activities in connection with Hope for Homeowners planning grants
- The general housing counseling program
- Rural homelessness and rural housing stability grants
- Indian housing block grants and native Hawaiian housing block grants
- Section 8 rental assistance programs
HUD notes that this list may change as HUD programs change.
HUD proposes in its proposed rule that individuals must show competency in six areas to become certified housing counselors. The areas are:
- Financial management
- Property maintenance
- Responsibilities of homeownership and tenancy
- Fair housing laws and requirements
- Housing affordability
- Avoidance of, and responses to, rental and mortgage delinquency and avoidance of eviction and mortgage default
HUD adds, “While the current codified regulations approve counseling agencies for participation in HUD’s Housing Counseling Program for a period of up to 3 years, HUD is not proposing reexamination of individual counselors every 3 years. While HUD may consider at some point requiring individual counselors to take courses to maintain their skills and keep up-to-date with homeownership/housing market issues, this proposed rule provides for the examination only to be taken and passed once for an individual to be certified.”
HUD is exploring online testing options, and says in the rule that it will try to present the exam in the most cost-effective way. HUD estimates that the per counselor cost of certification is $500. HUD says there are about 2,500 HUD-approved housing counseling agencies and 8,100 counselors, with a total certification cost of $4,050,000. Grantees are permitted to use a portion of their housing counseling grants to reduce the costs of training and examination.
Under the proposed rule, while counselors may still specialize in a particular area of housing counselor, all individual counselors must show at least basic competencies in the aforementioned six areas to ensure that they can identify cross-cutting issues that may also be relevant to a household’s situation and needs.
Read the proposed rule at: http://1.usa.gov/16nQKpg