Sponsors (3)
The bill expands and funds housing counseling to help delinquent borrowers avoid foreclosure and raises program accountability, but stricter performance standards and oversight risk reducing local counseling capacity and discouraging service to high‑need clients.
Delinquent homeowners with FHA, VA, USDA, or Section 184/184A loans will be offered housing counseling and, when statutory conditions are met, counseling costs can be paid from the Mutual Mortgage Insurance Fund, reducing borrowers' out-of-pocket costs and increasing chances to avoid foreclosure.
Homeowners may benefit from higher-quality counseling because HUD-mandated performance reviews and on-site reviews can identify underperforming agencies and counselors and drive improvements in counseling outcomes.
Improved oversight and funding for counseling can, over time, reduce foreclosures and financial instability for households that engage with the counseling programs.
Housing counseling agencies—particularly local providers—may lose assistance or face non-renewal based on new performance reviews, risking reduced local counseling capacity and less help for struggling borrowers.
Individual counselors can be placed on probation, required to retest, or permanently suspended after repeated failures, which could remove experienced counselors even when borrower defaults stem from factors outside counselors' control.
Comparing counselor performance to 'comparable markets' may unfairly penalize counselors who serve higher-risk borrowers and create incentives for agencies or counselors to avoid high-need clients.
Based on analysis of 2 sections of legislative text.
Expands HUD oversight of housing counseling, ties counselor performance to program participation, requires counseling offers to delinquent borrowers of certain federal loans, and permits FHA fund payment for counseling costs.
Makes HUD housing counseling programs subject to stronger performance reviews and accountability, ties continued program participation to counselor performance, and requires delinquent borrowers with certain federally backed or insured mortgages be offered housing counseling with costs for eligible FHA delinquent borrowers payable from the Mutual Mortgage Insurance Fund. It adds authority for on-site reviews, allows counselor-level comparisons to market default rates, and creates remediation and certification consequences for counselors found incompetent, while giving agencies procedural protections before assistance is denied.
Official title: To amend the Housing and Urban Development Act of 1968 to provide reforms to housing counseling and financial literacy programs.
Introduced December 15, 2025 by David Scott · Last progress December 15, 2025