How To Become A HUD-Approved Housing Counseling Agency
HUD provides housing counseling services directly or through private or public organizations with special competence and knowledge in counseling low and moderate income families. Section 106(a)(2) of the Housing and Urban Development Act of 1968 (12 USC 1701x) sanctions this.
Detailed information and additional requirements of the housing counseling program are provided in the Housing Counseling Program Handbook 7610.1. (A revision is in Departmental clearance and is expected to be posted to the HUD documents web site early next year.) The handbook may be requested by telephone weekdays between 8:00 a.m. and 5:15 p.m. EST by calling toll free (800) 767-7468. Written requests should be addressed to:
US Department of Housing and Urban Development,
Distribution Section, Room B-100,
451 Seventh Street, SW,
Washington, DC 20410.
Facsimiles may be transmitted to (202) 708-2313
The program handbook lists the criteria that all applicants must meet to receive HUD approval. A few of the more important are:
- Nonprofit Status: must function as a private or public nonprofit organization and submit evidence of nonprofit status as demonstrated by Section 501(c) of the Internal Revenue Code
- Experience: must have successfully administered a housing counseling program for at least one year
- Community Base: must have functioned for at least one year in the geographical area that the applicant proposes to serve
- Counseling Resources: must have sufficient resources to implement its proposed counseling plan no later than the date of HUD approval
Agencies interested in applying should review the qualifying criteria and complete the HUD-9900, Application for Approval as a Housing Counseling Agency. Submit the original with an original signature and one copy of the application form. Send applications to the appropriate HUD office or homeownership center, as outlined in Appendix 2 of HUD Handbook 7610.1. Local agencies may apply to the Homeownership Center that serves their state. Applications from national and regional organizations should be sent to HUD Headquarters.
HUD will review the application within 45 days of receipt. If HUD determines that the applicant may qualify as a HUD-approved housing counseling agency, the agency must attend a conference before a final determination letter is issued.
Applicants will be notified of application approval or denial within 60 days. If approved, a Letter of Approval will be sent to the applicant. The applicant must sign and date the letter and return it to HUD.
Agencies with questions about the application process or the status of requests should contact the appropriate Homeownership Center.
Housing Counseling System (HCS)
The Housing Counseling System (HCS) is a real-time automated data management system for controlling HUD's entire housing counseling program. It is HUD's sole web-based application for entering, reporting, reviewing, and analyzing data on the program. The system maintains a list of HUD-approved housing counseling agencies and contains each agency's profile information. HCS is used daily by both HUD personnel and the non-profit housing counseling agencies.
HCS agency information is used to produce the state-by-state lists of HUD-approved housing counseling agencies on HUD's website. Agencies are required to verify their data at least once every 90 days. If no change is required, simply mark the "Validated?" box at the bottom of the agency profile page to indicate the information has been verified. To update agency information, make the necessary changes and click the "OK" button on the bottom of the screen.
HUD has enhanced HCS to automatically collect data directly from agencies. Agencies are required to use an automated Client Management System interface with HUD's Client Activity Reporting System (CARS) to transmit all required information.
Common Questions about Form-HUD 9902 - (Top)
A revised HUD form 9902 became effective on October 1, 2006. Form 9902 is the Housing Counseling Program data collection instrument for all HUD-approved housing counseling agencies. The following questions and answers are designed to assist agencies in using the revised form and accurately reporting housing counseling activities.
What is the purpose of the revised form HUD-9902?
The goal of the revised HUD- 9902 form is to improve the quality of Housing Counseling Program data and to standardize the response methodology. The 9902 data is critical for demonstrating the impact of the program to Congress and the Office of Management and Budget and the White House. HUD uses data analysis to justify proposed appropriations, develop performance indicators, and report performance goal accomplishments.
Form HUD-9902 data also plays a critical role in Notice of Funding Availability (NOFA) scoring. HUD evaluates 9902 data within the context of type of services provided, costs, spending decisions, and other factors. It is extremely important for agencies to accurately report education and counseling activities.
How does an agency access the new form HUD-9902?
Each participating agency's template is available on HCS. HCS can be accessed on HUD's website.
The form can also be downloaded from hudclips. Select "forms", then select HUD-9*. Click twice on "Next List" to access the form. Note. Select the correct reporting year (two choices are listed - FY06 and FY07). Use FYO7 for the reporting period beginning October 1, 2006 and any future reporting.
When are form HUD-9902 submissions due?
Starting in FY 07, Form HUD-9902 is due quarterly. The first and third quarter reports and the midterm report are due on the last calendar day of the month after the end of the reporting period. The final report is due December 31st. In the rare instance where HUD or an agency terminates approval, the agency will be asked to submit form 9902 within 30 days from the date of termination.
Does quarterly reporting require submissions be cumulative?
Agency activities should be reported cumulatively. The quarterly 9902 should reflect cumulative year-to-date data.
How does an agency participating in the housing counseling program submit form 9902?
Every agency is required to submit form HUD-9902 electronically through the HCS system or through a Client Management System (CMS) that interfaces with HUD's database.
What is the reporting period?
HUD's reporting period follows the federal government's fiscal year cycle: October 1 through September 30.
What are the reporting requirements for State Housing Finance Agencies (SHFAs) that do not receive HUD funding?
An SHFA electing to participate in the program, despite not having received a grant,, must meet all program requirements, including Form 9902 reporting.
Many HUD-approved housing counseling agencies do not apply and/or receive funding through the NOFA. Why should these agencies submit a form 9902 and perform accurate data collection?
Submitting form 9902 is a requirement for continued HUD approval and program participation. Accurately reporting activities on 9902 is in your best interest. Accurate data assists HUD in demonstrating vital needs and demand for housing counseling nationwide. It is also a basis for HUD's justification of funding for training HUD-approved Housing Counseling Agencies.
Who and what gets counted on Form 9902?
Only counseling and education activities are recorded. Marketing and outreach, such as community presentations, are not recorded.
Is a course that occurs in four 2-hour sessions considered four courses or one?
The form is designed to capture participation in each complete course on a unique educational topic. Whether a course is completed in one 8-hour session, or four 2-hour classes, it counts as one course.
Does Section 6 exclusively capture workshop activity?
Yes. Section 6 exclusively captures workshop activity. One-on-one counseling activity is not to be recorded in Section 6.
Are group education and/or activities and results recorded in Section 7? For example, an individual participates in a homebuyer education course. That provides sufficient information to successfully purchase a home. Does the agency record an individual's participation in Section 6, the group section, and record the result in Section 7?
No. Group education/outreach session results aren't recorded in Section 7.
HUD is aware that some agencies have developed follow-up systems and/or surveys to capture results of group education sessions. HUD encourages that practice and grant recipient agencies can include the results in the midterm and final narratives.
If an agency offers predatory lending and financial literacy in one seminar, how should this be reported?
Report it in Section 6 under a workshop category or "h. other" category". This type of workshop is treated as one unique workshop covering different topics.
How can I quality control my submission to make sure that the data is accurate and complete?
The new form has a built-in quality control mechanism. This means that the Section 3 total = Section 4 total, = Section 5 total,= the total of Sections 6 and 7 combined.
HCS auto-populates HUD grant activity in the right hand column of form 9902. Will these HCS-produced figures be used to evaluate performance relative to projections made on the logic model, form HUD-96010?
No. The logic model will be used by grantees to make projections relative to the grant and report on the actual activities attributed to the grant. On the 9902, numbers HCS attributes to an agency will not necessarily be the same as the activity the agency reports on the logic model.
Do quarterly 9902 reports replace the logic model?
No. Specific HUD Housing Counseling grant activities will be reported through the logic model.
How were the race and ethnicity categories established?
The Office of Management and Budget requires us to collect this data and developed these categories. It is part of a government-wide effort to capture race and ethnicity data for all beneficiaries of government programs.
How does an agency properly complete Sections 3 and 4 of form 9902?
An agency should select one option under Section 3 and one under Section 4 for each counseling or education activity recorded.. This results in equal totals reported in Section 3 and Section 4.
HUD requires racial and ethnic data for both those participating in education an workshops and those receiving one-on-one counseling. Ideally, the number of households counted in the racial/ethnicity section would equal the total number counseled. The 9902 has a new category to facilitate this: "chose not to respond" for those clients who are unwilling or unable to self-identify.
There are no categories for people of Middle Eastern descent in Section 4. How would an agency report these clients?
Report these clients as "white" according to OMB guideline definition of "white" as "a person having origins in any of the original peoples of Europe, the Middle East, or North Africa".
What if an individual comes in for multiple, distinct types of counseling in a reporting period? Would an agency consider the person a new client each time and record demographic data each time?
Yes. Record racial and ethnic data each time an individual visits the agency for a different type of counseling service. For example, if an individual comes in for one type of counseling (pre-purchase), record demographic data, type of counseling, and outcome once the file is terminated. If the same person returns later in the reporting period for another type of counseling (default counseling), record the new activity in Section 7 and record demographic data a second time.
How does an agency report a client seeking counseling more than once for the same issue? For example, an individual receives housing counseling for mortgage default. The default is resolved through a special forbearance. Several months later, the person returns for default counseling again. Are these reported as two separate clients?
The answer depends on whether the agency terminated counseling after the first visit. In this example, the first visit resulted in an initiated forbearance agreement or payment plan. The agency should have terminated the counseling and closed the file. The second visit for the same issue counted as a new event and the agency should report the demographic information and counseling results again for the individual.
In the second scenario, the client never resolved the default at the first visit and the file was not terminated. The client's second session is considered a continuation of their default counseling. In this situation, the agency should only record demographic data once. The result of the counseling would be reported as: "currently receiving Foreclosure Prevention/Budget Counseling".
How often does HUD publish income data limits?
HUD publishes new income data limits each year. The latest set is available at: www.huduser.org/datasets/il.html
How does an agency accurately calculate income levels?
Agencies should record income levels in Section 5 for all activities and record individual counseling or group education activities in Sections 6 and 7. Income levels are based on the percentage of the median income for the area (AMI) for each client recorded. AMI's for each state or county can be found at HUD's website.
To find "Income Levels" data:
- Click on the HUD User data sets link
- On the Data Sets page, scroll down to the U.S. map
- Click on the applicable state to view Median Family Income by county and family size.
Counseling Common Questions - (Top)
General
Where can a housing counseling agency get more information about HUD's program?
Local Housing Counseling Agencies (LHCAs) and State Housing Finance Agencies (SFHAs), can find Homeownership Center (HOC) locations and phone numbers or refer to the latest Housing Counseling Notice of Funding Availability (NOFA). Intermediaries should contact HUD Headquarters at (202) 708-0317.
How can I become approved as a HUD certified housing counselor?
HUD certifies only housing counseling agencies. It does not certify individual counselors.
How does an agency become HUD-approved?
Requirements for becoming a HUD-approved local housing counseling agency (LHCA) or a national or regional intermediary are outlined in Chapter 2 of HUD Handbook 7610.1 Rev-4. Approval applications and instructions are available online. State Housing Finance Agencies (SHFAs) do not need HUD approval to apply for grants. These groups are simply required to meet the definition of a 'housing finance agency' in 24 CFR 266.5.
How long does it take to process an application to become a HUD-approved housing counseling agency?
Application processing times vary by HOC jurisdiction, time of year, and complexities specific to each applicant. The average processing time is 30 - 60 working days.
Can "for-profit" entities become HUD-approved?
No. For-profit entities are not eligible for approval.
What are the benefits of becoming a HUD-approved counseling agency?
HUD approval demonstrates that an agency meets certain industry standards and federal guidelines. This certification has increasingly become the benchmark for participation in various other public and private housing programs.
- HUD makes funding available for select HUD-approved agencies.
- HUD publishes an annual NOFA in the Federal Register to solicit proposals from HUD-approved agencies competing for available grant funds
- Approximately one-third of HUD-approved agencies nationwide receive grants
Does an agency need to be HUD-approved to apply for funds?
Yes. All agencies, except for SHFAs, must be HUD-approved on or before the date the SuperNOFA is published in the Federal Register to be eligible to apply for a direct grant from HUD.
Does an agency need separate HUD approval as a HCA to be an affiliate of an intermediary or SHFA?
No. However, intermediaries and SHFAs must ensure that affiliate and branch offices receiving sub-grants meet or exceed the standards for HUD-approved LHCAs in Chapter 2 of HUD Handbook 7610.1, REV.-4, CHG-1.
How does an agency become an affiliate of a national or regional intermediary, or a state housing finance agency?
Agencies must contact intermediaries and SFHAs directly concerning requests to become a branch or affiliate.
Can an agency submit more than one application, for instance, one for each branch?
No. Only one application is accepted.
Can an agency apply to more than one HOC if it has branches in more than one region?
No. The agency must apply to the HOC that has jurisdiction over its main office.
Who determines the awards and the amount of the awards?
Designated HOC staff rate and rank applications from LHCAs and SFHAs in their jurisdictions. Headquarters does the same for intermediaries. Award amounts are determined by the formula described in the SuperNOFA.
Does HUD provide any resources to approved agencies?
Yes. For example, HUD provides technical assistance to approved agencies. Training and informational materials may also be available, depending on available resources. Contact the Program Support Division of your local FHA Homeownership Center for information about these types of assistance.
Are there special considerations for any particular segment of the population?
Funding determinations are based on the criteria set forth in the SuperNOFA.
Does HUD consider geographic location when approving and funding agencies, such as areas of the country that have few or no HUD-approved counseling agencies?
The NOFA is designed to facilitate the equitable distribution of grant funds nationwide.
Does HUD have a mailing list? If so, how does an agency get on it?
All HUD-approved agencies and affiliates, or branch offices of intermediaries and SHFAs, are automatically placed on HUD's email listserv.
Is there a listing of HUD-approved Housing Counseling Agencies?
Yes. HUD maintains a list online.
If an approved agency does not receive a HUD grant, is the agency still required to provide counseling to HUD clients?
Yes. That is why agencies must demonstrate in their application that they have sufficient funding to carry out the proposed housing counseling plan.
Can a HUD-approved agency charge fees for counseling services?
HUD-approved agencies are prohibited from charging fees to clients participating in HUD/FHA programs. HUD-funded agencies are also prohibited from charging fees to clients served under a HUD grant.
How does a housing counseling agency report its activities to HUD?
Housing counseling agencies use an automated form 9902 system for reporting.
Record Keeping (pdf page)
HUD-approved housing counseling agencies must maintain accurate client records that comply with requirements of the most current version of HUD Handbook 7610.1. HUD verifies compliance during biennial reviews. HUD staff reviews all approved housing counseling agencies and affiliates of intermediaries every two years at a minimum. During biennial review visits, HUD samples an agency's housing counseling client and group session files. Training and contact information is listed at the end of this document. Common questions and responses describing HUD's record keeping procedures and requirements follow.
Does HUD have an automated system for recordkeeping?
Pending publication of a final rule [Docket No. FR-4798-F-02], beginning October 1, 2007, all Housing Counseling Agencies (HCAs) participating in HUD's Housing Counseling Program will be required to use a Client Management System (CMS) that interfaces with HUD's databases to collect and submit agency and client-level data. A CMS is an existing online tool that automates much of the housing counseling process, including client intake, file maintenance, financial and credit analysis, outreach, client notification, and reporting. CMS requirement guidance for Housing Counseling Agencies is described in detail at the end of this page. LINK ABOVE FOR OVERVIEW & BELOW FOR DETAILS
What can an agency expect during a biennial review? What can an agency do to make sure HUD monitors can easily find what they are looking for?
A biennial review is usually an on-site monitoring visit. Prior to the visit, HUD staff will review the agency's most current housing counseling plan and may request a copy of the agency's most recent form HUD-9902. During the visit, typically HUD staff will sample 10-20 client and group files using a checklist of items required by HUD Handbook 7610.1 Appendix 11. Appendix 11 lists all items covered by HUD staff during a biennial review.
An agency can help HUD monitor by maintaining its most current housing counseling plan on file with the appropriate HUD office. HUD staff will review this plan prior to an onsite visit. This plan:
- Outlines the agency's housing counseling services
- States in detail how services are delivered
- Describes anticipated or average time spent with clients on a specific activity
- Explains the steps used by housing counselors to analyze a client's housing needs and problems
- Describes how available resources will be used to deliver proposed services to a target population.
An agency can facilitate a HUD monitor's review by designating an available workspace, placing all requested information and files in a centralized location, and providing access to a copier.
