HUD Housing Counseling Program — Approved Agencies, Standards & Certification

Before you can close on an FHA loan, many lenders require — and for certain programs it is federally mandated — that you complete HUD-approved housing counseling. The Department of Housing and Urban Development's Housing Counseling Program (authorized by 12 U.S.C. § 1701x, implemented at 24 CFR Part 214) maintains a national network of approved agencies that provide free or low-cost counseling on homebuying, rental housing, foreclosure prevention, reverse mortgages, and other housing decisions. To become a HUD-approved counseling agency and receive HUD grant funding, an organization must meet substantive approval criteria, pass an application review, and maintain performance standards — all governed by Part 214. The program also separately certifies individual tribal housing counselors to serve Native American communities.

Legal Authority

• 12 U.S.C. § 1701x — Housing and Urban Development Act of 1968 § 106; authorizes HUD to provide assistance to housing counseling agencies; requires HUD to maintain a program of approved counseling agencies; directs HUD to establish certification standards for housing counselors
• 42 U.S.C. § 3535 — HUD Secretary's general regulatory authority; supports issuance of implementing regulations for housing counseling standards and grants
• 24 CFR Part 214 — HUD Housing Counseling Program regulation; establishes approval requirements for HUD-approved housing counseling agencies, counselor certification requirements, program performance standards, and grant administration rules

Key Mechanics

The HUD Housing Counseling Program approves and funds nonprofit organizations to provide free or low-cost housing counseling to consumers on homeownership, rental housing, mortgage delinquency, predatory lending, and reverse mortgages. To become a HUD-approved agency, an organization must submit an application demonstrating organizational capacity, financial stability, counselor qualifications, and geographic coverage; HUD reviews and approves applications on a rolling basis. Individual housing counselors at approved agencies must obtain HUD certification by passing the national Housing Counselor Examination (a proctored online test) or holding an equivalent recognized credential. Congress mandated counselor certification in the Dodd-Frank Act; the requirement took effect in 2017. Approved agencies must provide counseling consistent with HUD's National Industry Standards for Homeownership Education and Counseling; must avoid conflicts of interest (e.g., cannot receive compensation from lenders for referring borrowers); must maintain counseling records and provide HUD with quarterly activity data. For HECM (reverse mortgage) applicants, HUD-approved counseling from a HUD-certified counselor is mandatory before any HECM application — borrowers must receive a HECM Counseling Certificate confirming they completed counseling. HUD distributes grants to approved agencies through annual notices of funding availability; the program awards roughly $50 million annually.

Current Rule (2026)

What This Program Does

HUD's Housing Counseling Program does two things: (1) it approves organizations (called HUD-approved housing counseling agencies) that meet substantive program, staffing, and financial standards to provide housing counseling and receive HUD grant funding; and (2) it certifies individual tribal housing counselors to serve Native American communities.

HUD-approved agencies provide counseling across six service categories:

• Pre-purchase/homebuyer counseling: helping prospective homebuyers understand mortgage products, affordability, and the purchase process
• Pre-purchase homebuyer education workshops: group education sessions covering the homebuying process
• Non-delinquency post-purchase counseling: addressing issues like home maintenance, energy efficiency, and building equity after purchase
• Default/delinquency counseling: helping homeowners who have missed or are at risk of missing mortgage payments to understand their options (loan modification, forbearance, short sale, deed in lieu)
• Rental counseling: helping renters understand lease terms, tenant rights, and rental market navigation
• Reverse mortgage (HECM) counseling: required by FHA before any homeowner can take out a Home Equity Conversion Mortgage — helping older homeowners understand the risks and benefits of reverse mortgages

Key Provisions

§ 214.1 — Purpose: Part 214 implements the Housing Counseling Program authorized by § 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x); the purpose is to make housing counseling services available to homebuyers, homeowners, tenants, and homeless individuals to improve their housing conditions and meet their housing needs

§ 214.100 — Eligibility to apply: any nonprofit or governmental organization may apply for HUD approval as a housing counseling agency; commercial for-profit entities are not eligible for HUD-approved status or for HUD housing counseling grants; agencies may apply as local agencies, state housing finance agencies (SHFAs), multi-state organizations (MSOs), or intermediaries that pass grant funds through to affiliated local agencies

§ 214.103 — Approval criteria: to be approved, an organization must demonstrate:

• Mission alignment: the organization's principal purpose must include the provision of housing counseling services
• Experience: demonstrated capability to provide housing counseling, with qualified counselors on staff
• Financial soundness: stable financial status, with no delinquent federal debts or unresolved findings from HUD audits
• Management capacity: administrative systems adequate to track clients, maintain records, and report to HUD
• Compliance: no outstanding violations of applicable civil rights laws (Fair Housing Act, Section 504, Equal Credit Opportunity Act)
• Independence: the organization must be independent of real estate, mortgage lending, or other industries that could create conflicts of interest in counseling clients

§ 214.105 — Application process: agencies must complete HUD-prescribed application forms and submit to HUD electronically; agencies with branch offices must include information on all branches and their counselors; the application must include audited financial statements, documentation of counselor qualifications, and a description of the services to be provided

§ 214.107 — HUD approval: if the application meets all § 214.103 requirements, HUD approves the agency for a period of up to 3 years; HUD issues a written notice of approval specifying the services the agency is approved to provide; approved agencies are listed on HUD's national directory of HUD-approved housing counseling agencies (searchable at HUD.gov and by phone at 1-800-569-4287)

§ 214.109 — Disapproval: if the application fails to meet all requirements, HUD provides written reasons for denial; the applicant has 30 calendar days to appeal the disapproval; the appeal is heard by a HUD official who was not involved in the original decision; HUD may approve the application upon appeal if the agency demonstrates it meets the criteria

§ 214.200 — Inactive status: HUD may place an approved agency in inactive status (rather than terminating its approval) when the agency temporarily cannot meet participation requirements — for example, during a period of staff transition or financial restructuring; agencies in inactive status remain listed but may not counsel clients or receive new HUD referrals until restored to active status

§ 214.201 — Termination: HUD may terminate an agency's approval when:

• The agency no longer meets the approval criteria
• The agency materially misrepresented information in its application or reports
• The agency violated applicable civil rights or consumer protection laws
• The agency failed to comply with HUD grant requirements or program conditions
• The agency failed to maintain minimum counseling activity levels Termination requires written notice and an opportunity to respond; agencies may appeal termination through the process in § 214.205

§ 214.203 — Performance review: HUD conducts periodic performance reviews for all approved agencies; the review examines the quality of counseling, counselor qualifications, client outcome data, financial management of grant funds, and compliance with program requirements; agencies with unsatisfactory performance ratings may be placed on inactive status, required to submit a corrective action plan, or terminated

§ 214.205 — Appeals: agencies have a two-level appeal right — first to a HUD Deciding Official at the local or regional level, then to the Director of the Office of Housing Counseling at the national level; the appeal process applies to disapproval of new applications, refusal to renew existing approvals, placement on inactive status, and terminations

§ 214.300 — Counseling requirements: approved agencies must:

• Counsel clients on all relevant housing options and not steer them toward particular products or providers
• Provide counseling that is free from conflicts of interest
• Maintain client records for at least 3 years after service completion
• Use the HUD Client Management System (CMS) or a compatible system to track client interactions and report outcome data
• Ensure that all counselors providing certain types of counseling (particularly reverse mortgage counseling) hold the required HUD-recognized certifications

§ 214.313 — HUD HECM counseling requirement: before any borrower can receive a Home Equity Conversion Mortgage (HECM) — FHA's reverse mortgage program — the borrower must receive HUD-approved housing counseling from an agency certified to provide HECM counseling; the counseling session must cover: how HECMs work, costs and fees, alternatives to HECMs (home equity loans, sale-leaseback), implications for Medicaid eligibility and estate planning, and consumer rights; the counselor must issue a HECM counseling certificate that the lender retains in the loan file

§§ 214.400–214.403 — Certification of tribal housing counselors: a separate certification track for individual housing counselors serving Native American communities; certification requires:

• Competency in housing counseling topics (assessed through HUD-approved examination)
• Knowledge of housing programs available in Indian country (Section 184, NAHASDA, etc.)
• Ethics and professional conduct Tribal housing counselor certification is individual (not organizational) and renewable; it enables qualified counselors in tribal communities — which may lack access to HUD-approved agency offices — to provide certified housing counseling services to tribal members

How It Affects You

If you are seeking a mortgage, facing foreclosure, or navigating a housing decision: you can find a HUD-approved housing counseling agency for free by calling 1-800-569-4287 or searching at HUD.gov/housingcounseling. HUD-approved agencies are required to provide unbiased advice — they cannot steer you toward a particular lender, real estate agent, or product. Counseling for HECM reverse mortgages is federally required before you can close; for FHA purchase loans, some programs require pre-purchase counseling as a condition of assistance.

If you want to become a HUD-approved housing counseling agency: your organization must be a nonprofit or governmental entity with housing counseling as a principal purpose, with qualified counselors on staff, sound financial management, and no civil rights violations. The application process is competitive; HUD approves agencies for up to 3 years at a time and conducts performance reviews. HUD housing counseling grants are available to approved agencies to cover the cost of providing services to clients.

If you are a lender making HUD-insured or HUD-guaranteed loans: for HECM reverse mortgages, you must obtain the borrower's HUD housing counseling certificate before loan closing — this is a statutory requirement, not just a program rule. For certain other HUD programs (HOME, CDBG-funded downpayment assistance), counseling may be required as a program condition. Accepting the counseling certificate in the loan file closes the compliance requirement.

If you are in a tribal community: tribal housing counselors certified under § 214.400 can provide the same HUD-recognized counseling services as agency-based counselors — enabling housing counseling to reach tribal members who may be geographically distant from the nearest HUD-approved agency office.

Statutory Authority

This rule implements:

• 12 U.S.C. § 1701x — authorizes HUD to make grants and provide assistance to housing counseling programs; establishes the certification process for housing counselors; requires HECM counseling; defines the types of services that constitute housing counseling; authorizes the HUD-approved agency network
• 42 U.S.C. § 3535 — provides HUD's general administrative authority including authority to administer programs, issue grants, and regulate recipients

Recent Rulemakings

2017 Final Rule (82 FR 4224): major revision to Part 214 creating the tribal housing counselor certification track (Subpart F), expanding the definition of covered counseling services to include homeless counseling, and updating performance standards for approved agencies. 2012 Final Rule (77 FR 47210): established new approval criteria requiring agencies to demonstrate counselor competency through HUD-recognized certification or testing, responding to concerns about counseling quality in the reverse mortgage market. 2010 Dodd-Frank Act amendments to 12 U.S.C. § 1701x: added requirements for HUD to establish a national certification examination for housing counselors and to maintain a public database of HUD-approved counselors.

Pending Action