Budget compromise ‘zeroes out’ HUD counseling programs

The budget compromise between Democrats and Republicans last week eliminated $88 million in funding for nonprofit counseling groups approved by the Department of Housing and Urban Development. Several of the counseling groups sent a letter this week to members of the House and Senate, urging lawmakers to restore the money. They include the National Urban League, the National Neighborworks Association, the National Community Reinvestment Coalition among others. “Not only does this program provide financial support, it sets the organizational standards for delivering quality services,” the groups said. “Further, these cuts will have a devastating impact on the families that rely on these programs for support.” The program cuts include those for first-time homebuyer counseling and reverse mortgage counseling for senior homeowners. Other programs include counseling for people transitioning out of homeownership through foreclosure and into rentals and counseling for delinquent borrowers. A HUD spokesperson confirmed the “painful” cuts but could not comment further. “This is the primary funding for homebuyer counseling, post-purchase non-delinquency counseling (such as refinance and home repair loans), and reverse mortgage counseling,” said Bruce Dorpalen, a spokesman for Affordable Housing Centers of America. “In fact, Congress mandated that reverse mortgage counseling is a requirement for receiving a reverse mortgage, but the funding is now cut off.” The budget agreement was reached late Friday night. Republicans pushed for an won $78.5 billion in cuts from President Obama’s budget. The agreement, however, only funds the government through September, when the 2012 budget goes to a vote. Both Obama and Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, introduced plans. “The American people understand we can’t continue spending money we don’t have, especially when doing so is making it harder to create jobs and get our economy back on track,” said House Speaker John Boehner (R-Ohio) this week. In addition to the cuts to HUD counseling programs, however, the National Association of Home Builders said Thursday if deficit cuts are not done carefully, the struggling housing market will only continue to be harmed. Write to Jon Prior. Follow him on Twitter @JonAPrior.