Record Keeping

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 a workspace, placing all requested information and files in a centralized location, and providing access to a copier.

What information should a client file contain?

A client file should contain:

1. Client's file number.
2. Client's name, address and telephone number.
3. FHA case number (if applicable), loan or project number.
4. Interviewing housing counselor's name.
5. Interview date.
6. Information obtained during the screening and subsequent interviews or counseling sessions.
7. Demographic data.
8. Purpose and results of each visit.
9. Documentation specifying agency involvement on behalf of client.
10. Client's housing counseling plan.
11. Log of activities which includes documentation of any follow-up with client, such as participation in group sessions.
12. Date and cause for termination of counseling.

What is a client's housing counseling plan?

A client's housing counseling plan differs from an agency's housing counseling plan describing delivery of housing counseling services. A client's plan is prepared by a counselor after a screening interview. The plan states what the agency and the client will do to resolve the client's housing need or problem. The client is required to sign the plan.

What is a log of activities?

This is a list of activities an agency performs on behalf of a client. Activities include intake, follow-up, and telephone calls on behalf of the client, such as working with lenders for loss mitigation. Other activities include calls to other counselors for advice or ideas in resolving a client's housing problem(s), assembling documents showing financial analysis and evaluation to determine client's options, or attending group sessions or training.

The key to compiling a useful list is to provide detailed descriptions of each activity, including individuals involved and the date. For example, after contacting a lender, a housing counselor should note the date and time of telephone call, with whom the counselor spoke, and the conversation's results.

Is there any time limit after last contact for termination of a client?

HUD Handbook 7610.1 does not provide a specific time limit for termination of counseling. Paragraph 3-5 does require the agency to document every termination of counseling. Causes for termination may include the following:

• Client resolves his/her housing need or problem.
• Agency determines that further counseling will not meet the client's housing need or problem.
• Client terminates counseling.
• Client does not follow the agreed-upon housing counseling plan.
• Client fails to appear for counseling appointments or classes.

What exactly are HUD reviewers looking for in client files?

HUD reviewers verify all required information is included in a client's file. Reviewers also examine files to get a sense of the nature of counseling session(s) to ensure a client was well served. Reviewers seek supporting documentation that indicates:

• The counselor identified the client's housing need or problem.
• The counselor assessed the client's unique financial circumstances.
• The counselor collected appropriate documentation.
• The counselor offered appropriate advice and developed and communicated a realistic housing counseling plan.
• The counselor noted the cause and date for terminating counseling.

Do client files need to be organized in a certain order?

It is important that the agency's system lends itself to easy monitoring by HUD. There is no particular order required by HUD as long as all required information is in the file, either electronic or paper. This approach allows files to be tailored to best serve the operational procedures of each agency.

Many intermediaries and local housing counseling agencies are increasingly using on-line client management systems. A majority of information traditionally maintained in hard copy is now electronically stored. Housing counseling agencies are not required to keep a hard copy of all electronic information.

However, agencies must be able to print the information quickly for review by HUD monitors during a biennial review.

What are some of the most common file and record keeping problems HUD reviewers identify during biennial reviews?

Failure to catalogue any of the following:

• Counseling type (client problem or need).
• Complete client name and address.
• Housing counseling plan.
• Indication if billed to HUD grant.
• Indication if counseling was face-to-face.
• Documents demonstrating counselor discussed financial status and evaluated such items as income, debt and financial obligations to determine appropriate course of action for client.
• Follow-up by counselor.
• Termination of counseling - date and reason.

Do these record keeping requirements apply to affiliates and branches of intermediaries, state finance agencies, and non-funded HUD-approved agencies?

These requirements apply to all HUD-approved agencies. The most current version of HUD Handbook 7610.1 is the primary source of guidance on record-keeping. These requirements are also mandatory for affiliates and branches of HUD-approved intermediaries. HUD recently discovered in first-time reviews of numerous intermediaries that branches and affiliates were not maintaining records and files sufficiently accurately to demonstrate performance of quality counseling. Intermediaries and state finance agencies must assure that their affiliates and branches comply with all requirements in HUD Handbook 7610.1. These record-keeping requirements also apply to all HUD-approved local housing counseling agencies, not just HUD-funded agencies.

How can an agency obtain a copy of HUD Handbook 7610.1, Rev-4?

The handbook can be downloaded online. Select "Next Doc" after each section to advance to the next chapter or appendix.

A hard copy of the handbook can be ordered online or by calling toll free (800) 767-7468.

When exactly should an agency start a client file? For example, should a file be started when a counselor provides quick advice over the telephone? What about files for group-session participants?

An agency should not start an individual client file for a quick telephone call or a client's participation in group sessions only. A file should be started for each client that has a one-on-one counseling session. Client files should be started for telephone calls when substantive counseling occurred, that is an analysis of a client's unique situation or financial information.

Does each group session or course/workshop require its own file?

Yes. The current Handbook is somewhat unclear about group session files. The Handbook reads "each group" should have their own file. Because the dynamics of a group rarely stay exactly the same from session to session, each distinct group session, complete course, or workshop should have its own file and file number. Also see Common Questions on "Reporting."

Housing counseling agencies may offer several courses or topics as part of a homebuyer education workshop. For example, one class may address budgeting while another covers the loan process. Does an agency have to create a file for each individual class?

Yes. The agency must create a file for each individual class if the classes are taught as separate classes. For example, potential homebuyers may be required to complete several mini-courses, each scheduled at a different time. A group file would be required for each individual course. Alternatively, an agency may offer an all-day workshop for homebuyer education that covers several topics such as budgeting, the home buying process and credit. Since this is one class, the agency should create a group file for the class as a whole, not each individual topic.

What information needs to be contained in a group session file?

A group session file must contain the following information:

• File number.
• Participating clients' names, addresses and telephone numbers.
• Demographic data.
• Signature of each client for each session attended.
• Subject of each session.
• Name of each housing counselor participating in the session.
• Date, place and duration of each session.

Does each course or workshop require an assigned group session file number or is each individual participant assigned a client number?

Each course or workshop must be assigned a number. Individual participants are not assigned numbers.

Does the housing counseling agency create an individual file for clients that only attend a group session?

There is no need to create an individual file for clients only attending a group session. If a client follow-ups with a one-on-one session, a client file reflecting attendance at group session(s) should be created. If an individual client file already exists, group session attendance should be noted.

Client files often contain sensitive personal information. What guidance does HUD offer housing counseling agencies regarding client confidentiality and credit reports?

HUD expects housing counseling agencies to take confidentiality extremely seriously. Agencies may be subject to penalties provided in the Fair Credit Reporting Act.

• An agency must hold all client information in strict confidence in a secure location.
• An agency can disclose credit report information to clients depending on the terms of the contract between the agency and reporting credit bureau.
• Confidentiality rules also apply to HUD staff.
• Any information obtained by HUD staff as part of a biennial review will be held in the strictest confidence.

How long should an agency maintain files?

Agencies should retain both group and individual files for 3 years from the date the case file was terminated for housing counseling or from the date the final invoice was paid by HUD.