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

HUD’s strategy of spreading its available funding across a broad spectrum of agencies is evident in
the pattern of grant approvals for LHCA applications in FY 2007 (Exhibit 5-9). When agencies are
divided into four groups based on the amount of their grant request, there is little difference in the
share of agencies that are awarded funding, but there are large differences in the percent of the
requested amount that is awarded. Among agencies requesting $40,000 or less, on average HUD
awarded 93 percent of the amount requested. As the amount requested increases, the percent awarded
steadily declines. Agencies requesting between $60,000 and $100,000 on average receive 56 percent
of the requested amount, while those seeking more than $100,000 receive an average of 41 percent of
the requested amount.
Exhibit 5-9. LHCA Awards of HUD Counseling Funding FY 2007
Grant Request
Up to $40,000
$40,001 to $60,000
Share of
Agencies
Funded
75%
79%
No. of
Successful
Applicants
96
107
Average
Request for
Funded
Agencies
$32,416
$49,933
Average
Award
$30,338
$41,166
Average
Percent of
Request
$60,001 to $100,000 81% 86 $79,789 $44,326 56%
Above $100,000 78% 62 $139,381 $57,612 41%
Source: HUD data on funding applications and awards, FY 2007.
Note: Based on 491 applications.
94%
82%
Other common concerns voiced by counseling agencies in their comments on the survey related to the
challenges that result from the variability in HUD funding received year to year. The variability cited
by agencies was due both to annual fluctuations in the amounts awarded as well as the likelihood of
being funded in successive years. Exhibit 5-10 presents summary information on LHCA applications
for HUD counseling funding for fiscal years 2005 through 2007 to examine the degree to which
LHCA awards do fluctuate. 30
One factor that affects LHCA awards is the total amount of counseling funds that are awarded to
LHCAs. Between 2005 and 2006 the total amount of funding for counseling (excluding funds set
aside for training) declined from $41.7 million to $39.1 million, with the amount dedicated to LHCAs
declining from $15.7 million to $14.1 million. At the same time, the number of LHCAs applying for
funding increased from 388 to 442. In both years, HUD approved funding for nearly 90 percent of all
agencies that applied for funding. But the combination of more agencies applying and less funding
allocated to LHCAs resulted in smaller average grants—averaging just $36,360 in 2006 compared to
$45,368 in 2005.
30
Information on individual awards to counseling agencies through intermediaries was not available,
although the comments generally referred to concerns about variations in funding directly from HUD rather
than funding channeled through intermediaries.
Chapter 5. Sources of Agency Funding and Costs of Providing Service 69