24 CFR Part 214

24 CFR Part 214.pdf

Office of Housing Counseling – Agency Performance Review

24 CFR Part 214

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Office of Assistant Secretary for Housing, HUD
to be in accordance with sound actuarial and accounting practice. In determining net income or loss, the Commissioner shall take into consideration
all income received from fees, premiums, and earnings on investments of
the Fund, operating expenses, and provision for losses of the Fund.
§ 213.277 Right and liability under the
Cooperative Management Housing
Insurance Fund.
No mortgagor or mortgagee shall
have any vested right in a credit balance in either the General Surplus Account or the Participating Reserve Account. No mortgagor or mortgagee
shall be subject to any liability arising
under the mutuality of the Cooperative
Management Housing Insurance Fund.
§ 213.278 Distribution
share.

of

distributive

When the contract of insurance is
terminated by reason of payment in
full of the mortgage or by voluntary
termination approved by the Commissioner, and at such time or times prior
to such termination as the Commissioner may approve, the Commissioner
may distribute to a mortgagor under a
mortgage that is the obligation of the
Cooperative Management Housing Insurance Fund a share of the Participating Reserve Account in such manner and amount as he shall determine
to be equitable and in accordance with
sound actuarial and accounting practice.
§ 213.279 Maximum
tributive share.

amount

of

dis-

In no event shall a distributive share
of the Participating Reserve Account
exceed the aggregate paid scheduled
annual premiums of the mortgagor
paid to the year of termination of the
insurance or to the year of payment of
the share, if paid prior to termination.

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§ 213.280

Finality of determination.

The determination of the Commissioner as to the amount to be paid to
any mortgagor from the Cooperative
Management Housing Insurance Fund
shall be final and conclusive.

Pt. 214

Subpart C—Individual Properties
Released From Project Mortgage; Expiring Program
§ 213.501

Savings clause.

No new loans are being insured under
the Cooperative Housing Mortgage Insurance Program for individual properties released from a project mortgage. Any existing insured loans on individual properties released from a
project mortgage under this program
will continue to be governed by the
regulations on eligibility requirements, contract rights and obligations,
and servicing responsibilities in effect
as they existed immediately before December 26, 1996.
[61 FR 60160, Nov. 26, 1996]

PART 214—HOUSING COUNSELING
PROGRAM
Subpart A—General Program
Requirements
Sec.
214.1
214.3

Purpose.
Definitions.

Subpart B—Approval and Disapproval of
Housing Counseling Agencies
214.100
214.103
214.105
214.107
214.109

General.
Approval criteria.
Preliminary application process.
Approval by HUD.
Disapproval by HUD.

Subpart C—Inactive Status, Termination,
and Appeals
214.200 Inactive status.
214.201 Termination of HUD-approved status
and grant agreements.
214.203 Re-approval or removal as a result of
a performance review.
214.205 Appeals.

Subpart D—Program Administration
214.300 Counseling services.
214.303 Performance criteria.
214.305 Agency profile changes.
214.307 Performance review.
214.309 Reapproval and disapproval based on
performance review.
214.311 Funding.
214.313 Housing counseling fees.
214.315 Recordkeeping.
214.317 Reporting.

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§ 214.1

24 CFR Ch. II (4–1–10 Edition)

Subpart E—Other Federal Requirements
214.500
214.503

Audit.
Other requirements.

AUTHORITY: 12 U.S.C. 1701(x); 42 U.S.C.
3535(d).
SOURCE: 72 FR 55648, Sept. 28, 2007, unless
otherwise noted.

Subpart A—General Program
Requirements
§ 214.1

Purpose.

This part implements the Housing
Counseling program authorized by section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x).
Section 106 authorizes HUD to provide,
make grants to, or contract with public or private organizations to provide
a broad range of housing counseling
services to homeowners and tenants to
assist them in improving their housing
conditions and in meeting the responsibilities of tenancy or homeownership.
The regulations contained in this part
prescribe the procedures and requirements by which the Housing Counseling program will be administered.
These regulations apply to all agencies
participating in HUD’s Housing Counseling program.

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§ 214.3

Definitions.

The following definitions apply
throughout this part:
Action plan. A plan that outlines
what the housing counseling agency
and the client will do in order to meet
the client’s housing goals and, when
appropriate, addresses the client’s
housing problem(s).
Affiliate. A nonprofit organization
participating in the HUD-related Housing Counseling program of a regional
or national intermediary, or state
housing finance agency. The affiliate
organization is incorporated separately
from the regional or national intermediary or state housing finance agency. An affiliate is:
(1) Duly organized and existing as a
tax-exempt nonprofit organization;
(2) In good standing under the laws of
the state of the organization; and
(3) Authorized to do business in the
states where it proposes to provide
housing counseling services.

Branch or branch office. An organizational and subordinate unit of a local
housing counseling agency, multi-state
organization, regional or national
intermediary, or state housing finance
agency not separately incorporated or
organized, that participates in HUD’s
Housing Counseling program. A branch
or branch office must be in good standing under the laws of the state where it
proposes to provide housing counseling
services. A branch or branch office cannot be a subgrantee or affiliate.
Clients. Individuals or households
who seek the assistance of an agency
participating in HUD’s Housing Counseling program to meet a housing need
or resolve a housing problem.
Counseling. Counselor to client assistance that addresses unique financial
circumstances or housing issues and focuses on ways of overcoming specific
obstacles to achieving a housing goal
such as repairing credit, addressing a
rental dispute, purchasing a home, locating cash for a down payment, being
informed of fair housing and fair lending requirements of the Fair Housing
Act, finding units accessible to persons
with disabilities, avoiding foreclosure,
or resolving a financial crisis. Except
for reverse mortgage counseling, all
counseling shall involve the creation of
an action plan.
Education. Formal classes, with established curriculum and instructional
goals provided in a group or classroom
setting, covering topics applicable to
groups of people such as, but not limited to:
(1) Renter rights;
(2) The homebuying process;
(3) How to maintain a home;
(4) Budgeting;
(5) Fair housing;
(6) Identifying and reporting predatory lending practices;
(7) Rights for persons with disabilities; and
(8) The importance of good credit.
Housing counseling work plan. A participating agency’s plan to provide
housing counseling activities and services in a specified geographic area to
resolve or mitigate identified community needs and problems. The plan will
also describe the objectives of the
agency and the resources available to
meet
those
objectives.
An

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Office of Assistant Secretary for Housing, HUD
intermediary’s state housing finance
agency’s (SHFA) or multistate organization’s (MSO) plan includes similar
information regarding the services
they propose to provide to the network
of affiliated agencies or branches participating in their HUD-related Housing Counseling program.
Housing goal. A realistic, short- or
long-term objective set by the client,
with advice from a housing counselor.
HUD-approved
housing
counseling
agencies. Private and public nonprofit
organizations that are exempt from
taxation under section 501(a), pursuant
to section 501(c) of the Internal Revenue Code of 1996, 26 U.S.C. 501(a) and
501(c) and approved by HUD, in accordance with this part, to provide housing
counseling services to clients directly,
or through their affiliates or branches,
and which meet the requirements set
forth in this part.
Intermediary. A HUD-approved organization that provides housing counseling services indirectly through its
branches or affiliates, for whom it exercises control over the quality and
type of housing counseling services
rendered. The Housing Counseling program recognizes two types of intermediaries, which include:
(1) National intermediary. A national
intermediary provides, in multiple regions of the United States:
(i)
Housing
counseling
services
through its branches or affiliates or
both; and
(ii) Administrative and supportive
services to its network of affiliates or
branches, including, but not limited to,
pass-through funding, training, and
technical assistance.
(2) Regional intermediary. A regional
intermediary provides in a generally
recognized region within the United
States, such as the Southwest, Mid-Atlantic, New England:
(i)
Housing
counseling
services
through its branches or affiliates or
both; and
(ii) Administrative and supportive
services to its network of affiliates, or
branches, including, but not limited to,
pass-through funding, training, and
technical assistance.
Local
housing
counseling
agency
(LHCA). A housing counseling agency
that directly provides housing coun-

§ 214.100

seling services. An LHCA may have a
main office, and one or more branch offices, in no more than two contiguous
states.
Multi-state organization (MSO). A
multi-state organization provides housing counseling services through a main
office and branches in two or more
states.
Participating agency. Participating
agencies are all housing counseling and
intermediary organizations participating in HUD’s Housing Counseling
program,
including
HUD-approved
agencies, and affiliates and branches of
HUD-approved intermediaries, HUD-approved MSOs, and state housing finance agencies.
Reverse mortgage. A mortgage that
pays a homeowner loan proceeds drawn
from accumulated home equity and
that requires no repayment until a future time.
State housing finance agency (SHFA).
Any public body, agency, or instrumentality created by a specific act of a
state legislature empowered to finance
activities designed to provide housing
and related facilities through land acquisition, construction, or rehabilitation throughout an entire state. SHFAs
may provide direct counseling services
or subgrant housing counseling funds,
or both, to affiliated housing counseling agencies within the SHFA’s
state. ‘‘State’’ includes the several
states, Puerto Rico, the District of Columbia, Guam, the Commonwealth of
the Northern Mariana Islands, American Samoa, and the U.S. Virgin Islands.
Subgrantee. An affiliate of a HUD-approved intermediary or SHFA that receives a subgrant of housing counseling
funds provided under a HUD grant.

Subpart B—Approval and Disapproval of Housing Counseling Agencies
§ 214.100

General.

An organization may be approved by
HUD as a HUD-approved housing counseling agency upon meeting the requirements of § 214.103 and upon completing the application procedures set
forth in this subpart B.

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§ 214.103

24 CFR Ch. II (4–1–10 Edition)

(a) The approval of a counseling
agency does not create or imply a warranty or endorsement by HUD of the
listed agency, or their employees, including counselors, to a prospective
client or to any other organization or
individual, nor does it represent a warranty of any counseling provided by
the agency. Approval means only that
the agency has met the qualifications
and conditions prescribed by HUD.
(b) Effective date. Agencies approved
by HUD on or before October 29, 2007
and agencies that have submitted applications to HUD on or before September 28, 2007 and that are subsequently approved, are required to be in
full compliance with the requirements
in this part on October 1, 2007. Agencies
approved after October 29, 2007 must
comply with this part.

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§ 214.103

Approval criteria.

The following criteria for approval
apply to all agencies, MSOs, and intermediaries, including all local housing
counseling agencies, branches, and affiliates that are included in one application:
(a) Nonprofit and tax-exempt status. A
housing counseling agency must function as a private or public nonprofit organization, or be a unit of local, county, or state government. The agency
must submit evidence of nonprofit status and tax-exempt status under section 501(a), pursuant to section 501(c) of
the Internal Revenue Code of 1996 (26
U.S.C. 501(a) and (c)). Units of local,
county, or state government must submit proof of their authorization to provide housing counseling services.
(b) Experience. An agency must have
successfully administered a Housing
Counseling program for at least one
year. An intermediary must have operated in an intermediary capacity for at
least one year. To be considered part of
an LHCA’s, MSO’s, or intermediary’s
approval application, and to participate in the HUD-approved portion of
the intermediary’s, SHFA’s, or MSO’s
Housing Counseling program, affiliates
and branches must have successfully
administered a Housing Counseling
program for at least one year.
(c) Ineligible participants. An agency,
including any of the agency’s directors,

partners, officers, principals, or employees, must not be:
(1) Suspended, debarred, or otherwise
restricted under the Department’s, or
any other federal regulations;
(2) Indicted for, or convicted of, a
criminal offense that reflects upon the
responsibility, integrity, or ability of
the agency to participate in housing
counseling activities. These offenses
include criminal offenses that can be
prosecuted at a local, state, or federal
level;
(3) Subject to unresolved findings as
a result of HUD or other government
audit or investigations.
(d) Community base. A housing counseling agency and its HUD Program
branches and affiliates must have functioned for at least one year in the geographical area(s) the agency set forth
in its housing counseling work plan.
(e) Recordkeeping and reporting. The
agency must have an established system of recordkeeping so that client
files, electronic and paper, can be reviewed and annual activity data for the
agency can be verified, reported, and
analyzed. Client files, both electronic
and paper, must be kept confidential,
in accordance with § 214.315. This system must meet the requirements of 24
CFR 1.6, 24 CFR 84.21, and 24 CFR 121
and can be easily accessible to HUD for
all monitoring and audit purposes.
(f) Client management system. All participating agencies shall utilize an
automated housing counseling client
management system for the collection
and reporting of client-level information, including, but not limited to, financial and demographic data, counseling services provided, and outcomes
data. The system used must provide
the counseling agency with the tools
necessary to track and manage all
counseling and educational activities
associated with each client. Agencies
must utilize a Client Management System that satisfies HUD’s requirements
and interfaces with HUD’s databases.
(g) Housing counseling resources. The
agency must have the following resources sufficient to implement the
proposed housing counseling work plan
no later than the date of HUD approval:
(1) Funding. The application for approval must provide evidence of funds

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Office of Assistant Secretary for Housing, HUD
immediately available, or written commitment for funds to cover the cost of
operating the housing counseling work
plan during the initial 12-month period
of HUD approval.
(2) Staff. The agency must employ
staff trained in housing counseling, and
at least half the counselors must have
at least 6 months of experience in the
job they will perform in the agency’s
Housing Counseling program.
(3) Language skills. The agency must
have housing counselor(s) who are fluent in the language of the clients they
serve, or the housing counseling agency must use the services of an interpreter, or the agency must refer the
client to another agency that can meet
the client’s needs.
(h) Knowledge of HUD programs and
local housing market. The agency’s
housing counseling staff must possess a
working knowledge of HUD’s housing
and single-family mortgage insurance
programs, other state and local housing programs available in the community, consolidated plans, and the local
housing market. The staff should be familiar with housing programs offered
by conventional mortgage lenders and
other housing or related programs that
may assist their clients.
(i) Contracts or agreements to provide
eligible housing counseling services. An
agency and its branches or subgrantees
or affiliates must deliver all of the
housing counseling activities set forth
in the agency’s housing counseling
work plan. It is not permissible to contract out housing counseling services,
except:
(1) In geographic areas where a need
for housing counseling services is demonstrated and no HUD-approved housing counseling agency or its branches,
affiliates, or subgrantees exists. Under
this exception, the contract must delineate the respective Housing Counseling program responsibilities of the
contracting parties, the agency providing services (contractor) must meet
the HUD approval eligibility standards,
and the contracting agency must receive prior written approval from HUD.
(2) Intermediaries and SHFAs may
enter into agreements with affiliates to
provide housing counseling services.
The agreements with affiliates may be
in the form of an exchange of letters

§ 214.103

that delineate the respective Housing
Counseling program responsibilities of
the parties. Agreements must be sufficiently detailed to establish accountability and allow for adequate monitoring in accordance with 24 CFR part
84 (Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations) and 24 CFR part 85 (Administrative Requirements for Grants and Cooperative Agreements to States, Local
and Federally Recognized Indian Tribal
Governments), as applicable, and with
the OMB Circulars described therein.
(3) With prior approval from HUD,
and at HUD’s discretion, intermediary
organizations may operate a Housing
Counseling program with a network of
affiliated counselors, rather than affiliated counseling agencies, if the structure is designed to meet a special housing counseling need identified by HUD.
(j) Community resources. The housing
counseling agency must have established working relationships with private and public community resources
to which it can refer clients who need
help the agency cannot offer, including
agencies offering similar or related
services to non-English speaking clients.
(k) State and local requirements. An
agency and its branches and affiliates
must meet all state and local requirements for its operation.
(l) Facilities. All housing counseling
facilities of the agency and its
branches, affiliates, and subgrantees
must meet the following criteria:
(1) Have a clearly identified office,
with space available for the provision
of housing counseling services. The office should operate during normal business hours and offer extended hours
when necessary;
(2) Provide privacy for in-person
counseling and confidentiality of client
records;
(3) Provide accessibility features or
make alternate accommodations for
persons with disabilities, in accordance
with section 504 of the Rehabilitation
Act of 1973 (29 U.S.C. 794), 24 CFR parts
8 and 9, and the Americans with Disabilities Act (42 U.S.C. 12101 et seq.).
(m) Housing counseling work plan. (1)
The agency must submit a detailed yet

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§ 214.105

24 CFR Ch. II (4–1–10 Edition)

concise housing counseling plan that
explains: The needs and problems of
the target population; how the agency
will address one or more of these needs
and problems with its available resources; the type of housing counseling
services offered; fee structure, if applicable; the geographic service area to be
served; and the anticipated results
(outcomes) to be achieved within the
period of approval.
(2) The plan must be periodically reviewed and, when changed or amended,
the agency must notify and provide a
copy to HUD.
(3) The plan must meet the basic requirements described in § 214.300.
(4) An agency’s housing counseling
work plan must also address, if appropriate, alternative settings and formats for the provision of housing counseling services.

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§ 214.105 Preliminary application process.
(a) Submission. All agencies must
complete the forms prescribed by HUD
and submit the application and all supporting documentation to HUD. Agencies with branches or affiliates for
which the parent entity exercises control over the quality and type of housing counseling services rendered must
submit a single application for approval.
(b) Notwithstanding paragraph (a),
SHFAs are not required to submit an
application for HUD approval. However, to participate in HUD’s Housing
Counseling program, SHFAs must either submit a request and provide HUD
with a list of affiliates, if applicable,
and assure that they meet all program
requirements, or submit a request
through such other application procedure as HUD may periodically announce in the FEDERAL REGISTER or
other informational sources.
§ 214.107 Approval by HUD.
(a) Notice of approval. If an application package meets all requirements
outlined in § 214.103, HUD will approve
an agency for a period of up to 3 years.
HUD will advise the agency of its approval in the form of an approval letter
to the agency’s main office.
(b) Certificate of Approval. HUD will
issue a ‘‘Certificate of Approval’’ to the

approved agency. The certificate will
show the period of approval.
(c) Appearance on list of HUD-approved
and participating housing counseling
agencies. For purposes of client referrals, participating agencies that provide housing counseling services directly to clients must provide HUD
with the agency name and contact information, which may appear on HUD’s
Web site. In addition, names and addresses of all participating agencies
that provide housing counseling services directly may be made available to
the public through HUD’s toll-free
housing counseling hotline.
§ 214.109 Disapproval by HUD.
If an application package does not
meet all requirements in § 214.103, HUD
will provide the agency with the reasons for the denial in writing. Within
30 calendar days of the written notice
of denial, the agency may submit a revised application, or appeal HUD’s decision in writing to HUD, as provided
in § 214.205. If an agency decides to submit a revised application, the agency
may consult HUD, to determine the
specific actions needed to resolve the
deficiencies.

Subpart C—Inactive Status,
Termination, and Appeals
§ 214.200 Inactive status.
(a) HUD may change a participating
agency’s status to inactive, in lieu of
terminations of HUD-approved status
or removals from the list of HUD-approved agencies, under certain circumstances that may temporarily impair an agency from complying with its
housing counseling plan. An agency’s
status may be changed to inactive on a
case-by-case basis for a period not to
exceed 6 months, unless an extension is
provided by HUD under paragraph (d)
of this section. HUD may change an
agency’s status through either a request submitted to HUD or as a result
of information obtained by the Department. Some of the conditions under
which inactive status may be considered include, but are not limited to:
(1) Loss of counselor(s);
(2) Damage to facilities by natural
disasters that renders the agency unable to function properly;

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Office of Assistant Secretary for Housing, HUD
(3) Loss of funds;
(4) Relocation;
(5) Other circumstances caused by
reasons beyond the agency’s control; or
(6) Results of performance review.
(b) Agencies that seek temporary inactive status must submit a request to
HUD in writing. Documentation or evidence of the condition(s) that rendered
the agency incapable of carrying out
its housing counseling plan must be
submitted along with the request, if
possible. Upon receipt of the request,
HUD will review and notify the agency
of approval or rejection, in writing. If
approved, the agency’s name and contact information will be temporarily
removed from the HUD-approved Web
list of agencies and the telephone referral system.
(c) The agency must notify HUD in
writing and provide supporting documentation or evidence when it is ready
to resume operation, or no later than
the end of the inactive period. After review and acceptance by HUD, the agency’s contact information may be restored to the Web list of HUD-approved
and participating agencies and the
telephone referral system.
(d) At HUD’s discretion, if the condition(s) still exists, an extension of the
inactive period may be considered or
the agency may be terminated or removed from the Housing Counseling
program. HUD will notify the agency
in writing of its decision.

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§ 214.201 Termination
of
HUD-approved status and grant agreements.
(a) Cause for termination by HUD.
HUD may terminate an agency’s approval; remove an SHFA; remove one
or more branches or affiliates from the
HUD portion of an intermediary’s,
MSO’s, or SHFA’s counseling program;
and terminate any grant agreements (if
applicable) upon confirmation of any of
the following reasons:
(1) Noncompliance with program requirements;
(2) Failure to implement in whole or
in part the agency’s approved housing
counseling work plan or failure to notify HUD of changes in the agency’s
housing counseling work plan;
(3) Lack of the capacity to deliver
the housing counseling activities de-

§ 214.205

scribed in its approved housing counseling work plan;
(4) Failure to achieve outcomes described in the work plan;
(5) Misuse of grant funds; or
(6) HUD determines that there is
good cause.
(b) Agency withdrawal. The participating agency may withdraw from the
Housing Counseling program at any
time.
(c) Post-termination, post-withdrawal
requirements. All terminations by HUD,
or an agency’s withdrawal, must be in
writing. When a termination or withdrawal occurs, the agency must return
to HUD any unexpired ‘‘Certificate of
Approval.’’ A terminated or inactive
agency cannot continue to display the
certificate. If HUD has determined that
an agency will be terminated from participating in the Housing Counseling
program, and an agency does not voluntarily withdraw, then HUD may follow the provisions found in 24 CFR part
24.
§ 214.203 Re-approval or removal as a
result of a performance review.
HUD may conduct a periodic performance review for all agencies participating in the Housing Counseling
program. The performance review and
the terms of re-approval or removal of
a participating agency are described in
§ 214.307 and § 214.309. At the end of the
approval period, and upon completion
of a successful performance review, if
conducted, HUD will reapprove agencies.
§ 214.205

Appeals.

An agency making an application for
approval, or an approved agency seeking reapproval, shall have the right to
appeal any adverse decisions rendered
by HUD under this part:
(a) Appeal must be in writing. An agency may make a formal written appeal
to HUD.
(b) Timeliness. HUD must receive an
appeal within 30 days of the date of the
HUD decision letter to the applicant
agency. HUD is not bound to review appeals received after this 30-calendar
day period.
(c) Other action. Nothing in this section prohibits HUD from taking such

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§ 214.300

24 CFR Ch. II (4–1–10 Edition)

other action against an agency as provided in 24 CFR part 24, or from seeking any other remedy against an agency available to HUD by statute or otherwise.

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Subpart D—Program
Administration
§ 214.300 Counseling services.
(a) Basic requirements. (1) Agencies
must provide counseling to current and
potential homeowners and tenants to
assist them in improving their housing
conditions and in meeting the responsibilities of homeownership or tenancy.
(2) Except for reverse mortgage counseling, housing counselors and clients
must establish an action plan for each
counseling client.
(3) Counseling may take place in the
office of the housing counseling agency, at an alternate location, or by telephone, as long as mutually acceptable
to the housing counselor and client. All
agencies participating in HUD’s Housing Counseling program that provide
services directly to clients must provide in-person counseling to clients
that prefer this format.
(4) Regardless of setting or format,
counseling activities must be limited
to the geographic area specified in the
agency’s approved housing counseling
work plan.
(5) With prior approval from HUD, a
network of affiliated counselors or a
HUD roster of counselors, designed to
meet a special housing counseling
need, may be permitted to provide
specified types of counseling nationally.
(6) All participating agencies that
offer group educational sessions must
also offer individual counseling on the
same topics covered in the group educational sessions.
(b) Counseling services. For each client, all agencies participating in HUD’s
Housing Counseling program shall offer
the following basic services:
(1) Housing counseling, on at least
one of the topics described in paragraph (d) of this section, that enables a
client to make informed and reasonable decisions to achieve his or her
housing goal.
(2) Referrals to local, state, and federal resources.

(c) Follow-up. Make a reasonable effort to have follow-up communication
with the client, when possible, to assure that the client is progressing toward his or her housing goal, to modify
or terminate housing counseling, and
to learn and report outcomes.
(d) Agency’s housing counseling work
plan. (1) A participating agency shall
deliver housing counseling services
consistent with the agency’s housing
counseling work plan. The work plan
should identify housing counseling
services to be provided in response to
one or more of the needs in targeted
communities and geographic areas
where the agency and its branches and
affiliates provide their housing counseling services.
(2) Participating agencies may also
conduct marketing and outreach, including, but not limited to, providing
general information about housing opportunities, conducting information
campaigns, and raising awareness
about critical housing topics such as
predatory lending and fair housing topics.
(e) Approved housing counseling, education, and outreach topics. The following are examples of approved housing counseling, education, and outreach topics that participating agencies may provide to and discuss with
clients:
(1) Prepurchase/homebuying, including, but not limited to: Advice regarding readiness and preparation, Federal
Housing
Administration-insured
financing, housing selection and mobility, search assistance, fair housing and
predatory lending, budgeting and credit, loan product comparison, purchase
procedures, and closing costs;
(2) Resolving or preventing mortgage
delinquency, including, but not limited
to: Default and foreclosure, loss mitigation, budgeting, and credit;
(3) Home maintenance and financial
management for homeowners, including, but not limited to: Escrow funds,
budgeting, refinancing, home equity,
home improvement, utility costs, energy efficiency, rights and responsibilities of home owners, and reverse mortgages;
(4) Rental topics, including, but not
limited to: HUD rental and rent subsidy programs; other federal, state or

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local assistance; fair housing; housing
search assistance; landlord tenant
laws; lease terms; rent delinquency;
and
(5) Homeless assistance, including,
but not limited to: Information regarding emergency shelter, other emergency services, and transitional housing.
§ 214.303 Performance criteria.
To maintain HUD-approved status, a
participating agency must meet the
following requirements:
(a) Approval status. Agencies must
continue to comply with approval requirements in § 214.103.
(b) Workload. During each 12-month
period, the participating agency must
provide housing counseling to at least
30 clients. Agencies that offer only
housing counseling services limited to
reverse mortgages, including home equity conversion mortgages (HECMs),
are exempt from this requirement.
(c) Reporting. The agency must submit to HUD complete, accurate, and
timely activity reports, as described in
§ 214.317.
(d) Agency’s housing counseling work
plan. The agency must implement the
housing counseling work plan and demonstrate reasonable achievement of the
outcome objectives approved by HUD,
as described in § 214.103(k).
(e) Client referrals from HUD and other
participating agencies. Except as described in this paragraph, all clients
who contact the agency as a result of
these referrals must be served. In cases
where the agency does not offer the
unique services requested by the client
or does not have sufficient resources,
the agency must refer the client to another participating agency, preferably
in the area, or, failing the availability
of a participating agency, must make a
reasonable effort to refer the client to
another agency, that can help the client meet his or her needs.
(f) Conflicts of interest. (1) A director,
employee, officer, contractor, or agent
of a participating agency shall not engage in activities that create a real or
apparent conflict of interest. Such a
conflict would arise if the director, employee, officer, contractor, agent, his
or her spouse, child, general partner, or
organization in which he or she serves

§ 214.303

as employee (other than with the participating counseling agency), or with
whom he or she is negotiating future
employment, has a direct interest in
the client as a landlord, broker, or
creditor, or originates, has a financial
interest in, services, or underwrites a
mortgage on the client’s property,
owns or purchases a property that the
client seeks to rent or purchase, or
serves as a collection agent for the client’s mortgage lender, landlord, or
creditor.
(2) A director, employee, officer, contractor, or agent of a participating
agency shall not refer clients to mortgage lenders, brokers, builders, or real
estate sales agents or brokers in which
the officer, employee, director, his or
her spouse, child, or general partner
has a financial interest, neither may
they acquire the client’s property from
the trustee in bankruptcy or accept a
fee or any other consideration for referring a client to mortgage lenders,
brokers, builders, or real estate sales
agents or brokers.
(3) A director, employee, officer, contractor, or agent of a participating
agency or any member of his or her immediate family shall avoid any action
that might result in, or create the appearance of, administering the housing
counseling operation for personal or
private gain; providing preferential
treatment to any organization or person; or undertaking any action that
might compromise the agency’s ability
to ensure compliance with the requirements of this part and to serve the best
interests of its clients.
(4) HUD may investigate agency
practices and may take action to inactivate or terminate the agency’s approval or participation in the Housing
Counseling program.
(5) Participating agencies must notify HUD of conflicts of interest not
later than 15 calendar days after the
conflict occurred and report to HUD on
the corrective action taken to cure the
immediate, and avoid future, conflicts.
(g) Disclosure requirements. A participating agency must provide to all clients a disclosure statement that explicitly describes the various types of
services provided by the agency and
any financial relationships between
this agency and any other industry

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§ 214.305

24 CFR Ch. II (4–1–10 Edition)

partners. The disclosure must clearly
state that the client is not obligated to
receive any other services offered by
the organization or its exclusive partners. Furthermore, the agency must
provide information on alternative
services, programs, and products.
(h) Staff and supervision. The agency
must employ staff trained in housing
counseling, and at least half the counselors must have at least 6 months of
experience in the job they will perform
in the agency’s Housing Counseling
program. Supervisors of the housing
counselors must periodically monitor
the work of the housing counselors by
reviewing client files with the housing
counselor to determine the adequacy
and effectiveness of the housing counseling. The agency must document
these monitoring activities and make
the documentation available to HUD
upon request.
(i) Funding. The agency must maintain a level of funds that enables it to
provide housing counseling to at least
the required workload of clients every
year, whether or not the agency receives HUD funding.

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§ 214.305

Agency profile changes.

Participating agencies must notify
HUD within 15 days when any of the
following occurs:
(a) The agency loses or changes its
tax-exempt, nonprofit status.
(b) The agency no longer complies
with local and state requirements.
(c) Changes occur in any of the items
below:
(1) Address(es) of the agency’s main
office and the address(es) of its
branches and affiliates;
(2) Staff personnel responsible for the
Housing Counseling program, such as
the housing counselors and management staff;
(3) Telephone numbers of the main
office, affiliates, and branches; or
(4) Any other aspect of the agency’s
purpose or functions that may impair
its ability to comply with these regulations or the applicable grant agreement (e.g., lack of qualified housing
counselors).

§ 214.307

Performance review.

(a) HUD may conduct periodic on-site
or desk performance reviews of all participating agencies.
(b) The performance review will consist of a review of the participating
agency’s compliance with all program
requirements,
including
applicable
civil rights requirements, and the
agency’s level of success in delivering
counseling services.
§ 214.309 Reapproval and disapproval
based on performance review.
Based on the performance review,
HUD may determine whether to renew
the approval unconditionally or conditionally, temporarily change status to
inactive, or terminate approval or participation of the agency.
(a) Unconditional Reapproval. If the
agency is in full compliance with the
performance criteria of this part, HUD
may reapprove the agency unconditionally for up to 3 years.
(b) Conditional Reapproval. If the
agency fails to meet the performance
criteria, but the failure does not seriously impair the agency’s counseling
capability as required in this part,
HUD may extend the agency’s approval
or participation for up to 120 calendar
days.
(c) Inactive status. HUD may temporarily change an agency’s status to inactive, as provided in § 214.200.
(d) Follow-up Review. HUD may conduct a follow-up review to determine if
the deficiencies have been corrected.
(e) Termination of HUD Approval.
When HUD determines that the agency’s program deficiencies seriously impair the agency’s ability to comply
with this part, HUD may terminate approval or participation of the agency
immediately.
(f) Appeal. If HUD does not reinstate
the approval, or terminates participation, the agency may file an appeal, as
prescribed under § 214.205.
§ 214.311

Funding.

(a) HUD funding. HUD approval or
program participation does not guarantee funding from HUD. Funding for
the Housing Counseling program depends on appropriations from Congress
and are awarded competitively under

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Office of Assistant Secretary for Housing, HUD

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federal and HUD regulations and policies governing assistance programs, including the Department of Housing and
Urban Development Reform Act of 1989
(42 U.S.C. 3545 et seq.). If funds become
available that are to be competitively
awarded, HUD will notify the public
through a Notice of Funding Availability (NOFA) in the FEDERAL REGISTER and via the Internet or other
electronic media.
(b) Local funding sources. HUD recommends that approved agencies seek
and secure funding from funding
sources that may include local and
state governments, private foundations, and lending or real estate organizations. Agencies must assure that
such arrangements do not violate the
provisions regarding conflicts of interest described in § 214.303(e).
§ 214.313 Housing counseling fees.
(a)
Participating
agencies
may
charge reasonable and customary fees
for housing education and counseling
services, as long as the cost does not
create a financial hardship for the client. An agency’s fee schedule must be
posted in a prominent place that is easily viewed by clients, and be available
to HUD for review.
(b) Agencies must inform clients of
the fee structure in advance of providing services. Clients cannot be
charged for client intake.
(c) If any agency chooses to charge
fees, the agency must conform to the
following guidelines:
(1)
Provide
counseling
without
charge to persons who cannot afford
the fees;
(2) Fees must be commensurate with
the level of services provided;
(3) Agencies may not impose fees
upon clients for the same portion of or
for an entire service that is already
funded with HUD grant funds.
(d) The agency may also be reimbursed from clients for the direct cost
of obtaining copies of clients’ credit reports from credit reporting bureaus if
this does not cause a hardship for the
client. In cases where the participating
agency receives a discount for the cost
of credit reports, this discount must be
passed on to the client.
(e) Lenders may pay agencies for
counseling services, through a lump

§ 214.315

sum or on a case-by-case basis, provided the level of payment does not exceed a level that is commensurate with
the services provided, and is reasonable
and customary for the area, and does
not violate requirements under the
Real Estate Settlement Procedures Act
(12 U.S.C. 2601 et seq.). These transactions and relationships must be disclosed to the client as required in
§ 214.303(g).
§ 214.315 Recordkeeping.
(a) Recordkeeping system. Each participating housing counseling agency
must maintain a recordkeeping system. The system must permit HUD to
easily access all information needed for
a performance review. This system
must meet the requirements of 24 CFR
1.6, 24 CFR 84.21, and 24 CFR part 121.
(b) File retention requirements. Financial records, supporting documents,
statistical records and all other pertinent records, both electronic and on
paper, shall be retained for a period of
3 years from the date the case file was
terminated for housing counseling. If
the housing counseling agency is a recipient of a HUD housing counseling
grant, then the client files for the
housing counseling grant year must be
retained for 3 years from the date the
final grant invoice was paid by HUD.
(c) Grant activities. Recipients of HUD
housing counseling grants are required
to report activities under the grant in
a format acceptable to HUD and within
the designated time frames required by
the applicable grant agreement.
(d) Race, ethnicity, and income data.
Participating agencies must maintain
current and accurate data on the race,
ethnicity, and income of their counseling clients and education participants.
(e) Client file. The housing counseling
agency must maintain a separate confidential file for each counseling client
to document the action plan and the
services provided to the client, as described in § 214.300. For all counseling,
except for HECM counseling, the client
file must include an action plan. The
client file may be for an individual or
household or for a group of clients with
the same housing need.
(f) Group education file. The housing
counseling agency must maintain a

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§ 214.317

24 CFR Ch. II (4–1–10 Edition)

separate confidential file for each
course provided. This file must contain
a list of all participants, their race,
ethnicity and income data, course
title, course outline, instructors, and
date of each course.
(g)
Confidentiality.
Participating
agencies must ensure the confidentiality of each client’s personal and financial information, including credit
reports, whether the information is received from the client or from another
source. Failure to maintain the confidentiality of, or improper use of,
credit reports may subject the agency
to penalties under the Fair Credit Reporting Act (14 U.S.C. 1681 et seq.).
(h) Termination of services. The housing counseling agency must document
in the client’s file termination of housing counseling. Termination occurs or
may occur under any of these conditions:
(1) The client meets his or her housing need or resolves the housing problem;
(2) The agency determines that further housing counseling will not meet
the client’s housing need or resolve the
client’s housing problem;
(3) The agency attempts to, but is unable to, locate the client;
(4) The client does not follow the
agreed-upon action plan;
(5) The client otherwise terminates
housing counseling; or
(6) The client fails to appear for housing counseling appointments.

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§ 214.317 Reporting.
All participating agencies shall submit to HUD activity reports, which
may be required up to quarterly. The
reports must be submitted in the format, by the deadline, and in the manner prescribed by HUD. Participating
agencies that are also recipients of
HUD grants or subgrants may be required to submit additional reports, as
described in their grant agreements
and prescribed by HUD.

Subpart E—Other Federal
Requirements
§ 214.500 Audit.
Housing counseling grant recipients
and subrecipients shall be subject to

the audit requirements contained in 24
CFR parts 84 and 85. HUD must be provided a copy of the audit report within
30 days of completion.
§ 214.503

Other requirements.

In addition to the requirements of
this part, the Housing Counseling program is subject to applicable federal
requirements in 24 CFR 5.105.

PART 219—FLEXIBLE SUBSIDY PROGRAM
FOR
TROUBLED
PROJECTS
Sec.
219.1
219.2

Program operations.
Savings provision.

AUTHORITY: 12 U.S.C. 1715z-1a; 42 U.S.C.
3535(d).
SOURCE: 61 FR 14405, Apr. 1, 1996, unless
otherwise noted.

§ 219.1

Program operations.

Effective May 1, 1996, the Flexible
Subsidy Program for Troubled Projects
will be governed and operate under the
statutory provisions codified at 12
U.S.C. 1715z–1a, under the administrative policies and procedures contained
in any applicable HUD Handbooks, and
other administrative bulletins and notices as the Department may issue
from time to time.
§ 219.2

Savings provision.

Part 219, as it existed immediately
before May 1, 1996, (contained in the
April 1, 1995 edition of 24 CFR, parts 200
to 219) will continue to govern the
rights and obligations of housing owners, tenants, and the Department of
Housing and Urban Development with
respect to units and projects assisted
under the Flexible Subsidy Program
for Troubled Projects prior to May 1,
1996. A list of any amendments to this
part published after the CFR revision
date is available from the Office of the
Rules Docket Clerk, Department of
Housing and Urban Development, 451
Seventh Street, SW., Washington, DC
20410.

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