Housing Counseling Process Evaluation and Design of ... - HUD User

This last point highlights the fact that not all organizations providing housing counseling services are
HUD-approved. The most obvious exclusions are for-profit entities that provide these services,
which are not eligible for HUD approval. A potentially significant source of counseling by for-profit
organizations are banks themselves. A recent study of pre-purchase counseling on a sample of loans
primarily originated by banks for credit under the CRA found that 45 percent of the borrowers
receiving counseling received these services from their bank or lender. 15 In describing the evolution
of pre-purchase counseling, Quercia and McCarthy (2000) noted that during the early 1990s
counseling was commonly offered by Countrywide Home Loans and GE Capital by telephone. There
are also a variety of consumer credit counseling agencies that are for-profit and therefore would be
excluded from HUD approval.
Unfortunately, we do not have good estimates for the number of agencies offering housing counseling
services that are not HUD-approved. We interviewed several national organizations and SHFAs that
fund counseling services but do not receive HUD funding in an attempt to understand the housing
counseling that takes place “outside the HUD network.” However, most of these intermediaries and
SHFAs reported that their affiliates are HUD-approved and do in fact receive HUD funding for
housing counseling, either through other intermediaries or as individual HUD grantees. Based on our
interviews, it seems that, at least at present, there are relatively few non-profit organizations providing
housing counseling that are not HUD-approved.
Exhibit 2-5 illustrates the number of HUD-approved housing counseling agencies as of March 2008,
whether they are affiliated with a national or regional intermediary organization or SHFA, and the
number of branch offices that are associated with these different categories of agencies. As shown,
there are a total of 1,813 HUD-approved counseling agencies, which collectively have 659 branch
offices, yielding a total of 2,472 counseling agency offices throughout the country. Of these agencies,
834 are LHCAs that are identified in HUD’s administrative data as being unaffiliated with a national
or regional intermediary or a SHFA. These agencies are identified as having 529 branch locations in
addition to their main office. Of the remaining agencies, 834 are identified as either being affiliated
with a national or regional intermediary or are a branch of an intermediary. Collectively, these
agencies have 125 branch offices in addition to their main office. Finally, there are 145 agencies
identified as affiliates of SHFAs, which collectively have 5 branch offices.
15
Quercia and Spader, 2008.
16
Chapter 2. Overview of the Housing Counseling Industry