HUD changing housing counselor requirements

WASHINGTON – Dec. 15, 2016 – The U.S. Department of Housing and Urban Development (HUD) decided to mandate a higher standard for housing counselors involved in HUD-related programs.

Once an announced rule goes into effect, individuals who offer counseling services to consumers must be certified for HUD to accept them. In order to become certified, they must pass a standardized written exam and work for a HUD-approved housing counseling agency (HCA). Counselors must demonstrate competency in 6 areas:

  1. Financial management
  2. Property maintenance
  3. Responsibilities of homeownership and tenancy
  4. Fair housing laws and requirements
  5. Housing affordability
  6. Avoidance of, and responses to, rental and mortgage delinquency and avoidance of eviction and mortgage default

HUD announced the final rule this week, but it won’t take full effect for three years after HUD releases the certification examination. To help counselors prepare for the exam, HUD will offer training and study resources in English and Spanish. A practice test will be available shortly.

After the housing crisis, Congress recognized the value of HUD-approved housing counseling services to help struggling families, and it directed HUD to develop a standard certification process.

In addition to helping buyers qualify for a home, HUD-certified counselors help to protect consumers from fraudulent operators who prey upon owners facing mortgage difficulties. Even legitimate for-profit housing counselors can charge consumers hundreds of dollars for services that HUD-approved counselors provide free or at low-cost.

Once the new rule is fully implemented, HUD will manage an online database of HUD-approved housing counseling agencies and certified counselors, allowing consumers to quickly find a trusted, impartial advisor who will put the consumer’s best interests first.

A complete overview of the new rule is posted on HUD’s website.

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