$37 million in HUD grants to promote homeownership

Nearly 730,000 individuals and families will have a greater opportunity to find housing or keep the homes they have because of more than $37 million in housing counseling grants announced in November by Housing and Urban Development Secretary Mel Martinez.

The grants will assist more than 430,000 people to either become first-time homeowners or remain homeowners after their purchase.

The grants were awarded to 17 national and regional organizations and approximately 350 state and local housing counseling agencies.

"These housing counseling grants are an important part of this administration's goal to expand homeownership opportunities, particularly for minorities," said Martinez.

Of the $37.56 million in grants, $2.7 million is being awarded specifically to combat predatory lending, including awards to four national and regional intermediaries and 34 state and local organizations.

Grantees will assist unwary borrowers in avoiding unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default and even foreclosure.

Additionally, $2 million is being awarded specifically for counseling in conjunction with HUD's Section 8 Homeownership Voucher Program, which allows low-income individuals to use rental vouchers to purchase homes.

Based on past experience, HUD anticipates the counseling grants will enable approximately 257,000 would-be homeowners to learn how to improve their credit, strengthen money management skills and avoid predatory lenders and other unscrupulous practices. Another 175,000 existing homeowners will learn how to avoid delinquency and default, restructure debt and maintain their home. In addition, nearly 213,000 individuals and families who will receive HUD-funded counseling are renters. An estimated 16,000 homeless individuals and families will learn how to find emergency services and secure transitional housing.

HUD awards annual grants under this program through a competitive process. Organizations that apply for grants must be HUD-approved and are subject to biannual performance reviews to maintain their HUD-approved status.