Sponsors (3)
The bill increases access to foreclosure‑avoidance counseling and funds for struggling borrowers while tightening performance oversight of counselors and agencies—improving quality but risking reduced local capacity and incentives that could limit help for the highest‑need borrowers.
Delinquent borrowers with FHA, VA, USDA, or Section 184/184A loans (especially low‑income homeowners) will be offered housing counseling when 30+ days delinquent, increasing their chances to avoid foreclosure or loss of their home.
Delinquent FHA borrowers will face reduced out‑of‑pocket costs for counseling because counseling fees can be paid from the Mutual Mortgage Insurance Fund when statutory conditions are met, making assistance more accessible to struggling homeowners.
HUD’s required performance and on‑site reviews for counseling providers aim to raise program quality by identifying underperforming agencies and counselors and improving counseling outcomes for borrowers.
Housing counseling agencies risk loss of HUD assistance or non‑renewal based on new performance reviews, which could shrink local counseling capacity and reduce access to help for struggling homeowners and low‑income borrowers.
Individual counselors can face probation, retesting, or permanent suspension after two failed retests, which may remove experienced counselors (including when defaults are driven by factors outside a counselor’s control), degrading local expertise available to borrowers.
Comparing counselor performance to default rates in ‘comparable markets’ may penalize counselors who serve higher‑risk borrowers and create incentives to avoid high‑need clients, reducing access for the most vulnerable homeowners.
Based on analysis of 2 sections of legislative text.
Strengthens HUD housing-counseling oversight with periodic reviews, counselor sanctions, agency renewal denials, and permits FHA’s MMI Fund to pay counseling costs for delinquent borrowers.
Changes HUD’s housing counseling rules to add regular, on-site and paper performance reviews of counseling agencies and individual counselors, allow HUD to deny or end program assistance based on those reviews, and establish penalties for counselors found incompetent. Requires that borrowers who are 30+ days delinquent on certain federal mortgage types be offered housing counseling and permits the FHA Mutual Mortgage Insurance Fund to pay fair-market counseling costs for delinquent FHA borrowers when existing statutory conditions are met.
Introduced December 15, 2025 by David Scott · Last progress December 15, 2025