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First-time home buyers interested in purchasing a home with an FHA mortgage should seriously consider HUD’s offer to help by referring potential borrowers to HUD-approved housing counseling in the applicant’s local area. 

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FHA Loan Articles

News and Updates for Homeowners

FHA Home Loans and Housing Counseling

August 31, 2019 - First-time home buyers interested in purchasing a home with an FHA mortgage should seriously consider HUD’s offer to help by referring potential borrowers to HUD-approved housing counseling in the applicant’s local area. These referrals are intended to assist borrowers and are not punitive or considered a negative at home loan application time.

In 2019, visitors to the HUD official site were greeted by announcements of a new official site specifically for housing counseling needs. Those visiting this official site can learn about resources, finding a housing counselor, and learn how the FHA and HUD certify these counselors and agencies.

And these services are not restricted to those who seek mortgage loans. The HUD official site linked to above welcomes inquiries in the following areas:
 
  • Rental assistance
  • Section 8 programs
  • Buying a home
  • Help with homelessness 
  • Down payment assistance
  • HUD homes and how to purchase them

Housing counseling is an important service; borrowers may not understand how their credit scores affect them financially in terms of getting better interest rates, lower mortgage payments, how rental history may affect a home loan application, etc.

Participating in housing counseling cannot be used as a negative factor against you in a credit application to buy a home. The same is true for credit counseling workshops and other consumer help; don’t be afraid to reach out for help in these areas if you need it!

Some FHA loan programs require mandatory housing counseling; this is true of the FHA Reverse Mortgage, also known as the Home Equity Conversion Mortgage or FHA HECM loan. These mortgages, restricted to qualified borrowers aged 62 or older, are unlike other FHA loan products in many respects and have additional requirements.

FHA HECM loans cannot be issued unless the applicant(s) complete required mandatory housing counseling sessions that explain the legal rights and responsibilities of the borrower for these unique mortgage loans.

Other FHA home loan products may not require such counseling, but the service is valuable nonetheless, especially if you are interested in an FHA One-Time Close Construction Loan that is more complex and requires more steps in the loan process compared to purchasing an existing construction home.

If you have questions about the home buying process, have never purchased real estate before, or just need the name and address of a HUD approved housing counselor near you, consider calling the FHA/HUD at their toll-free number 1-800-CALL-FHA (1-800-225-5342) or ask your question via email to [email protected].

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