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

Of the 347 LHCAs that had received awards in 2005, 316 reapplied in FY 2006. The vast majority of
these agencies were refunded. But with the decline in the average award due to the increase in the
number of agencies funded, many of these refunded agencies experienced declines in the amount of
their grant of $10,000 or more. Including the 14 agencies whose grant applications were declined, a
third of LHCAs receiving HUD grants in 2005 and reapplying in 2006 experienced declines of
$10,000 or more in their HUD awards.
Exhibit 5-10. LHCA Counseling Funding Applications and Awards FY 2005 to 2007
Grant Request 2005 2006 2007
Total Counseling Funding
Total Counseling Funding* $41.7 $39.1 $41.1
Total LHCA Awards $15.7 $14.1 $14.7
Total Awards to Intermediaries and SHFAs $25.9 $25.0 $26.4
Awards to LHCAs
Number Applying 388 442 449
Number Funded 347 387 351
Percent Funded 89% 88% 78%
Average Grant $45,368 $36,360 $41,884
LHCA Re-Applications
Number Reapplying 316 349
Number Funded 302 299
Number with Award Decrease of more than $10K 92 46
Number with Award Increase of more than $10K 42 105
Number Rejected 14 50
Average 2005 Grant for Those Rejected 36,362 28,949
Source: HUD data on funding applications and awards, FY 2005 to 2007.
Note: “Total Counseling Funding” excludes funds used to support counselor training. Total annual
appropriations for the Housing Counseling Program include funds for training and so are somewhat higher than
shown here.
In 2007 the total funding for counseling rebounded somewhat to $41.1 million and the amount
awarded to LCHAs also increased, but at $14.7 million remained $1 million less than the 2005 level.
The number of LHCAs applying for funding was nearly the same as in 2006. But HUD rejected a
larger share of agencies, funding only 78 percent of those that applied. By funding fewer agencies,
HUD was able to increase the average award per agency, to $41,884. As a result, of those funded,
only half as many agencies as in 2006 experienced a decrease in funding of $10,000—46 compared to
92 in 2006. But when the higher share of rejected agencies is also taken into account, 28 percent of
LHCAs funded in 2006 experienced a decline of $10,000 or more in HUD funding in 2007, only
slightly lower than the 33 percent in 2006.
These figures support agencies’ contention that a sizeable number of agencies do experience large
fluctuations in HUD funding year to year. However, the information in Exhibit 5-10 also illustrates
HUD’s dilemma. If HUD tries to fund a large share of agencies when applications increase or the
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Chapter 5. Sources of Agency Funding and Costs of Providing Service