HUD's FY99 Budget
Congressional Justifications
Office of Housing
Housing Counseling Assistance
PROGRAM HIGHLIGHTS
SUMMARY OF BUDGET ESTIMATES
1. SUMMARY OF BUDGET REQUEST
The Budget provides a set-aside of $25 million within the HOME program appropriation for Fiscal Year 1999 for the Housing Counseling Program. This program provides a wide variety of counseling assistance to clients on housing matters, including renters and those interested in home purchase. Despite the success of the President�s National Homeownership Strategy, homeownership education and counseling are still needed. For example, four recent ethnographic studies (Cityscape: A Journal of Policy Development and research, March 1997) have examined home buying experiences of minority and immigrant households in the United States. These are gorups that are less likely than others to become homeowners. The studies found that lack of knowledge of the home buying process, lack of awareness about the kind of credit history needed to qualify for a mortgage and lack of knowledge of financing options all impeded homeownership by these households. HUD�s counseling activities are designed to allow more informed decisions about ownership options.
Housing Counseling Assistance is a significant component of the President�s commitment to increase the country�s homeownership rate by the year 2000. To further that goal, the Department has placed increasing emphasis on providing counseling through the use of intermediary organizations. These organizations are mainly national in scope and represent memberships of local community-based counseling agencies. Funding grants through these arrangements allow the Department to expand the availability of counseling, including activities for difficult-to-reach groups. The increase of $5 million over the 1998 level would expand this activity, and allow the intermediaries to support both broadly based and targeted activity. Nearly 35 thousand additional households could receive direct counseling and housing counseling education with this additional funding.
Another focus of this activity is a consumer telephone Hotline, as an education and consumer assistance tool. In 1997, for example, this tool was helpful in informing elderly home owners about potential abuses in the reverse mortgage program. Over 240 thousand inquiries were handled via telephone in the last 12 months.
2. CHANGES FROM 1997 ESTIMATES INCLUDED IN 1998 BUDGET
The 1998 Budget projected 1997 outlays at $2.9 million. Outlays are consistent with the fiscal year 1998 Budget.
3. CHANGES FROM ORIGINAL 1998 BUDGET ESTIMATES
The 1998 estimates reflect a reduction of $3 million in budget authority compared to the 1998 Budget request. The 1998 Appropriations Act continues to provide funding as a set-aside within the HOME program.
EXPLANATION OF INCREASES AND DECREASES
The increased level of funding will be used to expand the Department�s comprehensive homebuyer education programs. The funding is consistent with the Administration's commitment to the goal of the National Homeownership Strategy-to increase the number of homeowners nationwide. During fiscal year 1998, the Department expanded housing counseling efforts with an emphasis on intermediaries that have a national scope and presence. These larger organizations not only promise to bring greater economies of scale to outreach efforts, but also have inherent organizational capabilities which facilitate program operation. In addition, the Department is initiating counseling activities through state housing finance agencies that also have the capacity to significantly expand access for potential homebuyers.
PROGRAM DESCRIPTION
1. Legislative Authority. Section 106(a)(1)(iii) and Section 106(a)(2) of the Housing and Urban Development Act of 1968, as amended, authorize a broad range of counseling services to tenants and homeowners.
2.Program Area Organization The Department certifies and/or recertifies public and private nonprofit agencies that provide HUD-approved counseling assistance. The Secretary is authorized to provide and/or contract with public or private nonprofit organizations to provide information, advice, and technical assistance. This may include counseling and advice to tenants and homeowners concerning property maintenance, financial management and other appropriate matters to assist tenants in improving their housing conditions and in meeting their homeownership responsibilities.
Public and private nonprofit agencies apply to HUD to become approved counseling agencies. Such agencies have received grants to provide comprehensive housing counseling services including default counseling for homeowners, prepurchase counseling for prospective homeowners and preoccupancy, delinquency and displacement counseling for renters.
3. Performance Indicators
There are currently 1,200 HUD-approved local counseling agencies and nine national, regional or multi-state intermediaries throughout the United States. The Department expects to provide grants to approximately 300 local counseling agencies and five national organizations in 1998.