Sponsors (3)
The bill expands access to and potential payment for housing counseling for delinquent borrowers to help avoid foreclosure, but pairs that support with stricter performance oversight that could shrink counseling capacity and discourage serving higher‑risk clients.
Delinquent borrowers with FHA, VA, USDA, or Section 184/184A loans are offered access to housing counseling, increasing their chance to avoid foreclosure or loss of home.
Delinquent FHA borrowers can have housing counseling costs paid from the Mutual Mortgage Insurance Fund when statutory conditions are met, reducing out‑of‑pocket costs for struggling homeowners.
HUD’s use of performance reviews and on‑site reviews can identify underperforming agencies and counselors and improve the overall quality and effectiveness of counseling programs.
Housing counseling agencies face risk of losing assistance or not having grants renewed based on the new performance reviews, which could reduce local counseling capacity and limit access to help for struggling homeowners.
Comparing counselor performance to 'comparable markets' may penalize counselors who serve higher‑risk borrowers, creating incentives for providers to avoid high‑need clients and reducing access for the most vulnerable homeowners.
Individual counselors could face probation, mandatory retesting, and permanent suspension after repeated failed retests, which may remove experienced counselors—even where borrower defaults were beyond the counselor’s control—reducing available expertise.
Based on analysis of 2 sections of legislative text.
Expands HUD authority to review and sanction housing counselors and agencies, requires counseling offers for certain delinquent government-backed loans, and allows FHA's MMIF to pay counseling costs when allowed.
Creates new HUD oversight tools for the federal housing counseling program and requires counseling offers for delinquent borrowers on certain government-backed loans. It authorizes periodic performance reviews (including on-site reviews) of participating agencies and counselors, allows HUD to compare counselor outcomes to market default rates, and establishes education, probation, retesting, and possible suspension for counselors judged incompetent. It also lets HUD deny renewal of assistance after notice and an opportunity for an informal conference. For borrowers 30+ days delinquent on specified FHA, VA, USDA, and Section 184 loans, the bill requires offering housing counseling and authorizes the FHA Mutual Mortgage Insurance Fund to pay fair-market counseling costs for FHA-insured delinquent loans when statutory conditions are met.
Introduced December 15, 2025 by David Scott · Last progress December 15, 2025