Mark Kelly, Ruben Gallego Lead Pushback Against HUD Housing Counseling Cuts

Senators Mark Kelly (D-AZ) and Ruben Gallego (D-AZ) have spearheaded a letter to the Secretary of Housing and Urban Development (HUD), Scott Turner, pushing back against cuts to housing counseling funds.

In late March, Comprehensive Housing Counseling (CHC) and the Housing Counseling Training (HCT) received a notice of funding opportunity (NOFO) that would remove prepurchase housing counseling from the list of eligible activities covered under the program.

"Pre-purchase counseling has been a cornerstone of HUD's counseling program since 1968, created specifically to open the doors of homeownership to Americans who had long been shut out, and it remains just as essential today," Sens. Kelly and Gallego wrote. "For first-time and low- to moderate-income buyers, this guidance is often the difference between a sustainable investment and a financially devastating one. Housing counselors are a community-level guardrail, and eliminating their funding doesn't make the need disappear — it simply strips counselors of the federal resources to meet it."

Additionally, the NOFO tightens post-purchase and delinquency (late mortgage payment) counseling to government-backed mortgages only, leaving homeowners with conventional mortgages to face delinquency or foreclosure on their own.

On top of that, the fact that the NOFO was released in late March, seven months later than usual, the housing counseling programs were already without funds.

Kelly and Gallego commented, "The communities we represent depend on HUD-approved housing counseling agencies to serve as trusted guides through one of the most consequential financial decisions of families' lives."

"Narrowing eligible counseling services and allowing funding gaps of this magnitude abandons Americans at the two moments they need help the most: when they are trying to buy their first home, and when they are at risk of losing it," they concluded.

At the beginning of May, Gallego took issue with HUD's proposal to dilute the disparate impact standard, arguing that it would violate the Fair Housing Act and drive up housing costs.