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

amount of available funding declines, then average awards have to decline. On the other hand, if they
do try to increase or maintain the average award, then fewer agencies will be funded. In either case,
the result is that agencies will experience fluctuating funding levels.
Agencies’ concerns about a lack of funding may be mitigated somewhat in the coming years due to
greater Congressional support for counseling in the wake of the current foreclosure crisis. In FY
2008 Congress increased the total funding for housing counseling allowing HUD to make $46.8
million available to counseling agencies either directly or through intermediaries or SHFAs. The
NOFA indicates that $15.8 million of this total will be set aside for awards directly to LHCAs, with
$28.5 million be awarded to intermediaries and SHFAs and $2.5 million be set aside for a new
category of counseling agency—multi-state organizations (MSOs) that have branches in two or more
states in addition to their home state. Many MSOs are Consumer Credit Counseling Service
organizations affiliated with the National Foundation for Credit Counseling (NFCC). While some of
these organizations were funded in previous years through NFCC, others applied directly to HUD for
funding. The combination of a larger amount of funding being set aside for LHCAs than in FY 2007
along with the reduced competition from MSOs, provides an opportunity to fund the remaining
LHCAs at levels higher than recent years. In addition, in 2008 and 2009 NeighborWorks® America
is making available $336 million in grants to intermediaries, SHFAs, and local counseling agencies to
support foreclosure mitigation counseling. This substantial support for delinquency counseling
should free up the use of HUD funding for other types of counseling.
Taken as a whole, counseling agencies should have a much greater amount of funding in the coming
year. However, the increase in funding may create its own challenges. One challenge will be to
increase staffing levels quickly to absorb the additional funding. At the same, agencies will have to
orchestrate this increased capacity so that it can be reduced when the extraordinary levels of funding
are reduced once the foreclosure crisis eases.
Average Costs per Client
The survey results provide an opportunity to estimate the average cost to serve each client by
comparing the total budget for housing education and counseling to the reported total number of
clients assisted by the agency. Unfortunately, given the aggregate nature of the data on housing
counseling budgets, it was not possible to create separate estimates of costs by type of education and
counseling. The estimate is only an approximation for several reasons. First, it is likely that the
reported budgets are not consistent in terms of the types of costs included (most notably whether they
include allocations of organizational overhead). Second, there is some double counting of clients for
agencies that combine both workshops and counseling services as HUD’s 9902 form instructs
agencies to provide separate counts for clients that attend workshops and individual counseling—
even if they are the same clients (although clients attending multiple education or counseling sessions
should only be counted once in each category). But the reported information can provide some
interesting insights into how much per client costs vary with agency characteristics.
About half of all agencies have average costs per client of around $200 or less, with 25 percent under
$100 and 22 percent between $100 and $200 (Exhibit 5-11). Another 25 percent have average costs
between $200 and $400 and 8 percent have average costs of between $400 and $500. But while
nearly three-quarters of agencies have average costs below $500 per client, there is a great deal of
Chapter 5. Sources of Agency Funding and Costs of Providing Service 71