12 U.S. Code 1701x

12 U.S. Code § 1701x - Assistance with respect to housing for low- and moderate-income
families

(a) Authorization to provide information, advice, and technical assistance; scope of assistance;
authorization of appropriations
(1) The Secretary is authorized to provide, or contract with public or private organizations to
provide, information, advice, and technical assistance, including but not limited to—
(i)
the assembly, correlation, publication, and dissemination of information with respect to the
construction, rehabilitation, and operation of low- and moderate-income housing;
(ii)
the provision of advice and technical assistance to public bodies or to nonprofit or cooperative
organizations with respect to the construction, rehabilitation, and operation of low- and
moderate-income housing, including assistance with respect to self-help and mutual self-help
programs;
(iii)
counseling and advice to tenants and homeowners with respect to property maintenance,
financial management, and such other matters as may be appropriate to assist them in
improving their housing conditions and in meeting the responsibilities of tenancy or
homeownership; and
(iv)
the provision of technical assistance to communities, particularly smaller communities, to assist
such communities in planning, developing, and administering Community Development
Programs pursuant to title I of the Housing and Community Development Act of 1974 [42 U.S.C.
5301 et seq.].
(2)
The Secretary (A) shall provide the services described in clause (iii) of paragraph (1) for
homeowners assisted under section 235 of the National Housing Act [12 U.S.C. 1715z]; (B) shall,
in consultation with the Secretary of Agriculture, provide such services for borrowers who are
first-time homebuyers with guaranteed loans under section 502(h) of the Housing Act of 1949
[42 U.S.C. 1472(h)]; and (C) may provide such services for other owners of single family dwelling
units insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.] or guaranteed or
insured under chapter 37 of title 38. For purposes of this paragraph and clause (iii) of paragraph
(1), the Secretary may provide the services described in such clause directly or may enter into

contracts with, make grants to, and provide other types of assistance to private or public
organizations with special competence and knowledge in counseling low- and moderateincome families to provide such services.
(3)
There is authorized to be appropriated for the purposes of this subsection, without fiscal year
limitation, such sums as may be necessary; except that for such purposes there are authorized
to be appropriated $6,025,000 for fiscal year 1993 and $6,278,050 for fiscal year 1994. Of the
amounts appropriated for each of fiscal years 1993 and 1994, up to $500,000 shall be available
for use for counseling and other activities in connection with the demonstration program under
section 152 of the Housing and Community Development Act of 1992. Any amounts so
appropriated shall remain available until expended.
(4) Homeownership and Rental Counseling Assistance.—
(A) In general.—
The Secretary shall make financial assistance available under this paragraph to HUD-approved
housing counseling agencies and State housing finance agencies.
(B) Qualified entities.—
The Secretary shall establish standards and guidelines for eligibility of organizations (including
governmental and nonprofit organizations) to receive assistance under this paragraph, in
accordance with subparagraph (D).
(C) Distribution.—
Assistance made available under this paragraph shall be distributed in a manner that
encourages efficient and successful counseling programs and that ensures adequate
distribution of amounts for rural areas having traditionally low levels of access to such
counseling services, including areas with insufficient access to the Internet. In distributing such
assistance, the Secretary may give priority consideration to entities serving areas with the
highest home foreclosure rates.
(D) Limitation on distribution of assistance.—
(i) In general.—None of the amounts made available under this paragraph shall be distributed
to—
(I)
any organization which has been convicted for a violation under Federal law relating to an
election for Federal office; or
(II)

any organization which employs applicable individuals.
(ii) Definition of applicable individuals.—In this subparagraph, the term “applicable individual”
means an individual who—
(I) is—
(aa)
employed by the organization in a permanent or temporary capacity;
(bb)
contracted or retained by the organization; or
(cc)
acting on behalf of, or with the express or apparent authority of, the organization; and
(II)
has been convicted for a violation under Federal law relating to an election for Federal office.
(E) Grantmaking process.—
In making assistance available under this paragraph, the Secretary shall consider appropriate
ways of streamlining and improving the processes for grant application, review, approval, and
award.
(F) Authorization of appropriations.—There are authorized to be appropriated $45,000,000 for
each of fiscal years 2009 through 2012 for—
(i)
the operations of the Office of Housing Counseling of the Department of Housing and Urban
Development;
(ii)
the responsibilities of the Director of Housing Counseling under paragraphs (2) through (5) of
subsection (g); and
(iii)
assistance pursuant to this paragraph for entities providing homeownership and rental
counseling.
(b) Loans to nonprofit organizations or public housing agencies; purpose and terms; repayment;
authorization of appropriations; deposit of appropriations in Low and Moderate Income
Sponsor Fund

(1)
The Secretary is authorized to make loans to nonprofit organizations or public housing agencies
for the necessary expenses, prior to construction, in planning, and obtaining financing for, the
rehabilitation or construction of housing for low or moderate income families under section
235 of the National Housing Act [12 U.S.C. 1715z] or any other federally assisted program. Such
loans shall be made without interest and shall not exceed 80 per centum of the reasonable
costs expected to be incurred in planning, and in obtaining financing for, such housing prior to
the availability of financing, including, but not limited to, preliminary surveys and analyses of
market needs, preliminary site engineering and architectural fees, site acquisition, application
and mortgage commitment fees, and construction loan fees and discounts. The Secretary shall
require repayment of loans made under this subsection, under such terms and conditions as he
may require, upon completion of the project or sooner, and may cancel any part or all of a loan
if he determines that it cannot be recovered from the proceeds of any permanent loan made to
finance the rehabilitation or construction of the housing.
(2)
The Secretary shall determine prior to the making of any loan that the nonprofit organization or
public housing agency meets such requirements with respect to financial responsibility and
stability as he may prescribe.
(3)
There are authorized to be appropriated for the purposes of this subsection not to exceed
$7,500,000 for the fiscal year ending June 30, 1969, and not to exceed $10,000,000 for the
fiscal year ending June 30, 1970. Any amounts so appropriated shall remain available until
expended, and any amounts authorized for any fiscal year under this paragraph but not
appropriated may be appropriated for any succeeding fiscal year.
(4)
All funds appropriated for the purposes of this subsection shall be deposited in a fund which
shall be known as the Low and Moderate Income Sponsor Fund, and which shall be available
without fiscal year limitation and be administered by the Secretary as a revolving fund for
carrying out the purposes of this subsection. Sums received in repayment of loans made under
this subsection shall be deposited in such fund.
(c) Grants for homeownership counseling organizations
(1) In generalThe Secretary of Housing and Urban Development may make grants—
(A)
to nonprofit organizations experienced in the provision of homeownership counseling to enable
the organizations to provide homeownership counseling to eligible homeowners; and

(B)
to assist in the establishment of nonprofit homeownership counseling organizations.
(2) Program requirements
(A)
Applications for grants under this subsection shall be submitted in the form, and in accordance
with the procedures, that the Secretary requires.
(B)
The homeownership counseling organizations receiving assistance under this subsection shall
use the assistance only to provide homeownership counseling to eligible homeowners.
(C) The homeownership counseling provided by homeownership counseling organizations
receiving assistance under this subsection shall include counseling with respect to—
(i)
financial management;
(ii)
available community resources, including public assistance programs, mortgage assistance
programs, home repair assistance programs, utility assistance programs, food programs, and
social services; and
(iii)
employment training and placement.
(3) Availability of homeownership counselingThe Secretary shall take any action that is
necessary—
(A) to ensure the availability throughout the United States of homeownership counseling from
homeownership counseling organizations receiving assistance under this subsection, with
priority to areas that—
(i)
are experiencing high rates of home foreclosure and any other indicators of homeowner
distress determined by the Secretary to be appropriate;
(ii)
are not already adequately served by homeownership counseling organizations; and
(iii)

have a high incidence of mortgages involving principal obligations (including such initial service
charges, appraisal, inspection, and other fees as the Secretary shall approve) in excess of 97
percent of the appraised value of the properties that are insured pursuant to section 203 of the
National Housing Act [12 U.S.C. 1709]; and
(B)
to inform the public of the availability of the homeownership counseling.
(4) Eligibility for counselingA homeowner shall be eligible for homeownership counseling under
this subsection if—
(A)
the home loan is secured by property that is the principal residence (as defined by the
Secretary) of the homeowner;
(B)
the home loan is not assisted under title V of the Housing Act of 1949 [42 U.S.C. 1471 et seq.];
and
(C) the homeowner is, or is expected to be, unable to make payments, correct a home loan
delinquency within a reasonable time, or resume full home loan payments due to a reduction in
the income of the homeowner because of—
(i)
an involuntary loss of, or reduction in, the employment of the homeowner, the selfemployment of the homeowner, or income from the pursuit of the occupation of the
homeowner;
(ii)
any similar loss or reduction experienced by any person who contributes to the income of the
homeowner;
(iii)
a significant reduction in the income of the household due to divorce or death; or
(iv) a significant increase in basic expenses of the homeowner or an immediate family member
of the homeowner (including the spouse, child, or parent for whom the homeowner provides
substantial care or financial assistance) due to—
(I)
an unexpected or significant increase in medical expenses;

(II)
a divorce;
(III)
unexpected and significant damage to the property, the repair of which will not be covered by
private or public insurance; or
(IV)
a large property-tax increase; or
(D)
the Secretary of Housing and Urban Development determines that the annual income of the
homeowner is no greater than the annual income established by the Secretary as being of lowor moderate-income.
(5) Notification of availability of homeownership counseling
(A) Notification of availability of homeownership counseling
(i) Requirement
Except as provided in subparagraph (C), the creditor of a loan (or proposed creditor) shall
provide notice under clause (ii) to (I) any eligible homeowner who fails to pay any amount by
the date the amount is due under a home loan, and (II) any applicant for a mortgage described
in paragraph (4).
(ii) ContentNotification under this subparagraph shall—
(I)
notify the homeowner or mortgage applicant of the availability of any homeownership
counseling offered by the creditor (or proposed creditor);
(II)
if provided to an eligible mortgage applicant, state that completion of a counseling program is
required for insurance pursuant to section 203 of the National Housing Act [12 U.S.C. 1709];
(III)
notify the homeowner or mortgage applicant of the availability of homeownership counseling
provided by nonprofit organizations approved by the Secretary and experienced in the
provision of homeownership counseling, or provide the toll-free telephone number described
in subparagraph (D)(i);
(IV)

notify the homeowner by a statement or notice, written in plain English by the Secretary of
Housing and Urban Development, in consultation with the Secretary of Defense and the
Secretary of the Treasury, explaining the mortgage and foreclosure rights of servicemembers,
and the dependents of such servicemembers, under the Servicemembers Civil Relief Act (50
U.S.C. App. 501 et seq.) [now 50 U.S.C. 3901 et seq.], including the toll-free military one source
number to call if servicemembers, or the dependents of such servicemembers, require further
assistance; and
(V)
notify the housing or mortgage applicant of the availability of mortgage software systems
provided pursuant to subsection (g)(3).
(B) Deadline for notificationThe notification required in subparagraph (A) shall be made—
(i)
in a manner approved by the Secretary; and
(ii)
before the expiration of the 45-day period beginning on the date on which the failure referred
to in such subparagraph occurs.
(C) Notification
Notification under subparagraph (A) shall not be required with respect to any loan for which
the eligible homeowner pays the amount overdue before the expiration of the 45-day period
under subparagraph (B)(ii).
(D) Administration and complianceThe Secretary shall, to the extent of amounts approved in
appropriation Acts, enter into an agreement with an appropriate private entity under which the
entity will—
(i) operate a toll-free telephone number through which any eligible homeowner can obtain a
list of nonprofit organizations, which shall be updated annually, that—
(I)
are approved by the Secretary and experienced in the provision of homeownership counseling;
and
(II)
serve the area in which the residential property of the homeowner is located;
(ii)
monitor the compliance of creditors with the requirements of subparagraphs (A) and (B); and

(iii)
report to the Secretary not less than annually regarding the extent of compliance of creditors
with the requirements of subparagraphs (A) and (B).
(E) Report
The Secretary shall submit a report to the Congress not less than annually regarding the extent
of compliance of creditors with the requirements of subparagraphs (A) and (B) and the
effectiveness of the entity monitoring such compliance. The Secretary shall also include in the
report any recommendations for legislative action to increase the authority of the Secretary to
penalize creditors who do not comply with such requirements.
(6) DefinitionsFor purposes of this subsection:
(A)
The term “creditor” means a person or entity that is servicing a home loan on behalf of itself or
another person or entity.
(B)
The term “eligible homeowner” means a homeowner eligible for counseling under paragraph
(4).
(C)
The term “home loan” means a loan secured by a mortgage or lien on residential property.
(D)
The term “homeowner” means a person who is obligated under a home loan.
(E)
The term “residential property” means a 1-family residence, including a 1-family unit in a
condominium project, a membership interest and occupancy agreement in a cooperative
housing project, and a manufactured home and the lot on which the home is situated.
(7) Regulations
The Secretary shall issue any regulations that are necessary to carry out this subsection.
(8) Authorization of appropriations
There are authorized to be appropriated to carry out this section $7,000,000 for fiscal year
1993 and $7,294,000 for fiscal year 1994, of which amounts $1,000,000 shall be available in
each such fiscal year to carry out paragraph (5)(D). Any amount appropriated under this
subsection shall remain available until expended.

(d) Prepurchase and foreclosure-prevention counseling demonstration
(1) PurposesThe purpose of this subsection is—
(A)
to reduce defaults and foreclosures on mortgage loans insured under the Federal Housing
Administration single family mortgage insurance program;
(B)
to encourage responsible and prudent use of such federally insured home mortgages;
(C)
to assist homeowners with such federally insured mortgages to retain the homes they have
purchased pursuant to such mortgages; and
(D)
to encourage the availability and expansion of housing opportunities in connection with such
federally insured home mortgages.
(2) Authority
The Secretary of Housing and Urban Development shall carry out a program to demonstrate the
effectiveness of providing coordinated prepurchase counseling and foreclosure-prevention
counseling to first-time homebuyers and homeowners in avoiding defaults and foreclosures on
mortgages insured under the Federal Housing Administration single family home mortgage
insurance program.
(3) Grants
Under the demonstration program under this subsection, the Secretary shall make grants to
qualified nonprofit organizations under paragraph (4) to enable the organizations to provide
prepurchase counseling services to eligible homebuyers and foreclosure-prevention counseling
services to eligible homeowners, in counseling target areas.
(4) Qualified nonprofit organizations
The Secretary shall select nonprofit organizations to receive assistance under the
demonstration program under this subsection based on the experience and ability of the
organizations in providing homeownership counseling and their ability to provide communitybased prepurchase and foreclosure-prevention counseling under paragraphs (5) and (6) in a
counseling target area. To be eligible for selection under this paragraph, a nonprofit
organization shall submit an application containing a proposal for providing counseling services
in the form and manner required by the Secretary.

(5) Prepurchase counseling
(A) Mandatory participationUnder the demonstration program, the Secretary shall require any
eligible homebuyer who intends to purchase a home located in a counseling target area and
who has applied for (as determined by the Secretary) a qualified mortgage (as such term is
defined in paragraph (9)) on such home that involves a downpayment of less than 10 percent of
the principal obligation of the mortgage, to receive counseling prior to signing of a contract to
purchase the home. The counseling shall include counseling with respect to—
(i)
financial management and the responsibilities involved in homeownership;
(ii)
fair housing laws and requirements;
(iii)
the maximum mortgage amount that the homebuyer can afford; and
(iv)
options, programs, and actions available to the homebuyer in the event of actual or potential
delinquency or default.
(B) Eligibility for counselingA homebuyer shall be eligible for prepurchase counseling under this
paragraph if—
(i)
the homebuyer has applied for a qualified mortgage;
(ii)
the homebuyer is a first-time homebuyer; and
(iii)
the home to be purchased under the qualified mortgage is located in a counseling target area.
(6) Foreclosure-prevention counseling
(A) Availability
Under the demonstration program, the Secretary shall make counseling available for eligible
homeowners who are 60 or more days delinquent with respect to a payment under a qualified
mortgage on a home located within a counseling target area. The counseling shall include
counseling with respect to options, programs, and actions available to the homeowner for
resolving the delinquency or default.

(B) Notification of delinquencyUnder the demonstration program, the Secretary shall require
the creditor of any eligible homeowner who is delinquent (as described in subparagraph (A)) to
send written notice by registered or certified mail within 5 days (excluding Saturdays, Sundays,
and legal public holidays) after the occurrence of such delinquency—
(i)
notifying the homeowner of the delinquency and the name, address, and phone number of the
counseling organization for the counseling target area; and
(ii)
notifying any counseling organization for the counseling target area of the delinquency and the
name, address, and phone number of the delinquent homeowner.
(C) Coordination with emergency homeownership counseling program
The Secretary may coordinate the provision of assistance under subsection (c) with the
demonstration program under this subsection.
(D) Eligibility for counselingA homeowner shall be eligible for foreclosure-prevention counseling
under this paragraph if—
(i)
the home owned by the homeowner is subject to a qualified mortgage; and
(ii)
such home is located in a counseling target area.
(7) Scope of demonstration program
(A) Designation of counseling target areas
The Secretary shall designate 3 counseling target areas (as provided in subparagraph (B)), which
shall be located in not less than 2 separate metropolitan areas. The Secretary shall provide for
counseling under the demonstration program under this subsection with respect to only such
counseling target areas.
(B) Counseling target areasEach counseling target area shall consist of a group of contiguous
census tracts—
(i)
the population of which is greater than 50,000;
(ii)

which together constitute an identifiable neighborhood, area, borough, district, or region
within a metropolitan area (except that this clause may not be construed to exclude a group of
census tracts containing areas not wholly contained within a single town, city, or other political
subdivision of a State);
(iii)
in which the average age of existing housing is greater than 20 years; and
(iv)
for which (I) the percentage of qualified mortgages on homes within the area that are
foreclosed exceeds 5 percent for the calendar year preceding the year in which the area is
selected as a counseling target area, or (II) the number of qualified mortgages originated on
homes in such area in the calendar year preceding the calendar year in which the area is
selected as a counseling target area exceeds 20 percent of the total number of mortgages
originated on residences in the area during such year.
(C) Mortgage characteristics
In designating counseling target areas under subparagraph (A), the Secretary shall designate at
least 1 such area that meets the requirements of subparagraph (B)(iv)(I) and at least 1 such
area that meets the requirements of subparagraph (B)(iv)(II).
(D) Expansion of target areas
The Secretary may expand any counseling target area during the term of the demonstration
program, if the Secretary determines that counseling can be adequately provided within such
expanded area and the purposes of this subsection will be furthered by such expansion. Any
such expansion shall include only groups of census tracts that are contiguous to the counseling
target area expanded and such census tract groups shall not be subject to the provisions of
subparagraph (B).
(E) Designation of control areas
For purposes of determining the effectiveness of counseling under the demonstration program,
the Secretary shall designate 3 control areas, each of which shall correspond to 1 of the
counseling target areas designated under subparagraph (A). Each control area shall be located
in the metropolitan area in which the corresponding counseling target area is located, shall
meet the requirements of subparagraph (B), and shall be similar to such area with respect to
size, age of housing stock, median income, and racial makeup of the population. Each control
area shall also comply with the requirements of subclause (I) or (II) of subparagraph (B)(iv),
according to the subclause with which the corresponding counseling target area complies.
(8) Evaluation

Each organization providing counseling under the demonstration program under this
subsection shall maintain records with respect to each eligible homebuyer and eligible
homeowner counseled and shall provide information with respect to such counseling as the
Secretary or the Comptroller General may require.
(9) DefinitionsFor purposes of this subsection:
(A)
The term “control area” means an area designated by the Secretary under paragraph (7)(E).
(B)
The term “counseling target area” means an area designated by the Secretary under paragraph
(7)(A).
(C)
The term “creditor” means a person or entity that is servicing a loan secured by a qualified
mortgage on behalf of itself or another person or entity.
(D) The term “displaced homemaker” means an individual who—
(i)
is an adult;
(ii)
has not worked full-time, full-year in the labor force for a number of years, but has during such
years, worked primarily without remuneration to care for the home and family; and
(iii)
is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading
employment.
(E)
The term “downpayment” means the amount of purchase price of home required to be paid at
or before the time of purchase.
(F)
The term “eligible homebuyer” means a homebuyer that meets the requirements under
paragraph (5)(B).
(G)

The term “eligible homeowner” means a homeowner that meets the requirements under
paragraph (6)(D).
(H) The term “first-time homebuyer” means an individual who—
(i)
(and whose spouse) has had no ownership in a principal residence during the 3-year period
ending on the date of purchase of the home pursuant to which counseling is provided under
this subsection;
(ii)
is a displaced homemaker who, except for owning a residence with his or her spouse or residing
in a residence owned by the spouse, meets the requirements of clause (i); or
(iii)
is a single parent who, except for owning a residence with his or her spouse or residing in a
residence owned by the spouse while married, meets the requirements of clause (i).
(I)
The term “home” includes any dwelling or dwelling unit eligible for a qualified mortgage, and
includes a unit in a condominium project, a membership interest and occupancy agreement in a
cooperative housing project, and a manufactured home and the lot on which the home is
situated.
(J)
The term “metropolitan area” means a standard metropolitan statistical area as designated by
the Director of the Office of Management and Budget.
(K)
The term “qualified mortgage” means a mortgage on a 1- to 4-family home that is insured
under title II of the National Housing Act [12 U.S.C. 1707 et seq.].
(L)
The term “Secretary” means the Secretary of Housing and Urban Development.
(M) The term “single parent” means an individual who—
(i)
is unmarried or legally separated from a spouse; and
(ii)

(I)
has 1 or more minor children for whom the individual has custody or joint custody; or
(II)
is pregnant.
(10) Regulations
The Secretary may issue any regulations necessary to carry out this subsection.
(11) Authorization of appropriations
There are authorized to be appropriated to carry out this subsection $365,000 for fiscal year
1993 and $380,330 for fiscal year 1994.
(12) Termination
The demonstration program under this subsection shall terminate at the end of fiscal year
1994.
(e) Certification
(1) Requirement for assistance
An organization may not receive assistance for counseling activities under subsection (a)(1)(iii),
(a)(2), (a)(4), (c), or (d) of this section, or under section 1701w of this title, unless the
organization, or the individuals through which the organization provides such counseling, has
been certified by the Secretary under this subsection as competent to provide such counseling.
(2) Standards and examinationThe Secretary shall, by regulation, establish standards and
procedures for testing and certifying counselors and for certifying organizations. Such standards
and procedures shall require, for certification of an organization, that each individual through
which the organization provides counseling shall demonstrate, and, for certification of an
individual, that the individual shall demonstrate, by written examination (as provided under
subsection (f)(4)), competence to provide counseling in each of the following areas:
(A)
Financial management.
(B)
Property maintenance.
(C)
Responsibilities of homeownership and tenancy.

(D)
Fair housing laws and requirements.
(E)
Housing affordability.
(F)
Avoidance of, and responses to, rental and mortgage delinquency and avoidance of eviction
and mortgage default.
(3) Requirement under HUD programs
Any homeownership counseling or rental housing counseling (as such terms are defined in
subsection (g)(1)) required under, or provided in connection with, any program administered by
the Department of Housing and Urban Development shall be provided only by organizations or
counselors certified by the Secretary under this subsection as competent to provide such
counseling.
(4) Outreach
The Secretary shall take such actions as the Secretary considers appropriate to ensure that
individuals and organizations providing homeownership or rental housing counseling are aware
of the certification requirements and standards of this subsection and of the training and
certification programs under subsection (f).
(5) Encouragement
The Secretary shall encourage organizations engaged in providing homeownership and rental
counseling that do not receive assistance under this section to employ organizations and
individuals to provide such counseling who are certified under this subsection or meet the
certification standards established under this subsection.
(f) Homeownership and rental counselor training and certification programs
(1) Establishment
To the extent amounts are provided in appropriations Acts under paragraph (7), the Secretary
shall contract with an appropriate entity (which may be a nonprofit organization) to carry out a
program under this subsection to train individuals to provide homeownership and rental
counseling and to administer the examination under subsection (e)(2) and certify individuals
under such subsection.
(2) Eligibility and selection
(A) Eligibility

To be eligible to provide the training and certification program under this subsection, an entity
shall have demonstrated experience in training homeownership and rental counselors.
(B) SelectionThe Secretary shall provide for entities meeting the requirements of subparagraph
(A) to submit applications to provide the training and certification program under this
subsection. The Secretary shall select an application based on the ability of the entity to—
(i)
establish the program as soon as possible on a national basis, but not later than the date under
paragraph (6);
(ii)
minimize the costs involved in establishing the program; and
(iii)
effectively and efficiently carry out the program.
(3) Training
The Secretary shall require that training of counselors under the program under this subsection
be designed and coordinated to prepare individuals for successful completion of the
examination for certification under subsection (e)(2). The Secretary, in consultation with the
entity selected under paragraph (2)(B), shall establish the curriculum and standards for training
counselors under the program.
(4) Certification
The entity selected under paragraph (2)(B) shall administer the examination under subsection
(e)(2) and, on behalf of the Secretary, certify individuals successfully completing the
examination. The Secretary, in consultation with such entity, shall establish the content and
format of the examination.
(5) Fees
Subject to the approval of the Secretary, the entity selected under paragraph (2)(B) may
establish and impose reasonable fees for participation in the training provided under the
program and for examination and certification under subsection (e)(2), in an amount sufficient
to cover any costs of such activities not covered with amounts provided under paragraph (7).
(6) Timing
The entity selected under paragraph (2)(B) to carry out the training and certification program
shall establish the program as soon as possible after such selection, and shall make training and
certification available under the program on a national basis not later than the expiration of the
1-year period beginning upon such selection.

(7) Authorization of appropriations
There are authorized to be appropriated to carry out this subsection $2,000,000 for fiscal year
1993 and $2,084,000 for 1994.
(g) Procedures and activities
(1) Counseling procedures
(A) In general
The Secretary shall establish, coordinate, and monitor the administration by the Department of
Housing and Urban Development of the counseling procedures for homeownership counseling
and rental housing counseling provided in connection with any program of the Department,
including all requirements, standards, and performance measures that relate to
homeownership and rental housing counseling.
(B) Homeownership counselingFor purposes of this subsection and as used in the provisions
referred to in this subparagraph, the term “homeownership counseling” means counseling
related to homeownership and residential mortgage loans. Such term includes counseling
related to homeownership and residential mortgage loans that is provided pursuant to—
(i)
section 105(a)(20) of the Housing and Community Development Act of 1974 (42 U.S.C.
5305(a)(20));
(ii) in the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.]—
(I)
section 9(e) (42 U.S.C. 1437g(e));
(II)
section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D));
(III)
section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
(IV)
section 23(c)(4) (42 U.S.C. 1437u(c)(4));
(V)
section 32(e)(4) (42 U.S.C. 1437z–4(e)(4));
(VI)

section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B));
(VII)
sections 302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–1(b)(6), 1437aaa–2(b)(7)); and
(VIII)
section 304(c)(4) (42 U.S.C. 1437aaa–3(c)(4));
(iii)
section 302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000 (42
U.S.C. 1437f note);
(iv)
sections 12773(b)(2) and 12808(b) of title 42;
(v)
this section and section 1701w of this title;
(vi)
section 4110(d)(2)(G) of this title;
(vii)
sections 12872(b)(6), 12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6) of title 42;
(viii)
section 11408(b)(1)(F)(iii) [1] of title 42;
(ix)
sections 202(3) 1 and 810(b)(2)(A) 1 of the Native American Housing and Self-Determination Act
of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A));
(x) in the National Housing Act [12 U.S.C. 1701 et seq.]—
(I)
in section 203 (12 U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) of
subsection (b), subsection (c)(2)(A), and subsection (r)(4);
(II)
subsections (a) and (c)(3) of section 237; 1 and
(III)

subsections (d)(2)(B) and (m)(1) of section 255 (12 U.S.C. 1715z–20);
(xi)
section 502(h)(4)(B) of the Housing Act of 1949 (42 U.S.C. 1472(h)(4)(B));
(xii)
section 1701z–7 of this title; and
(xiii)
section 1701z–16 of this title.
(C) Rental housing counselingFor purposes of this subsection, the term “rental housing
counseling” means counseling related to rental of residential property, which may include
counseling regarding future homeownership opportunities and providing referrals for renters
and prospective renters to entities providing counseling and shall include counseling related to
such topics that is provided pursuant to—
(i)
section 105(a)(20) of the Housing and Community Development Act of 1974 (42 U.S.C.
5305(a)(20));
(ii) in the United States Housing Act of 1937—
(I)
section 9(e) (42 U.S.C. 1437g(e));
(II)
section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
(III)
section 23(c)(4) (42 U.S.C. 1437u(c)(4));
(IV)
section 32(e)(4) (42 U.S.C. 1437z–4(e)(4));
(V)
section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); and
(VI)
section 302(b)(6) (42 U.S.C. 1437aaa–1(b)(6));
(iii)

section 12773(b)(2) of title 42;
(iv)
this section;
(v)
section 12872(b)(6) of title 42;
(vi)
section 11408(b)(1)(F)(iii) 1 of title 42;
(vii)
sections 202(3) 1 and 810(b)(2)(A) 1 of the Native American Housing and Self-Determination Act
of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); and
(viii)
the rental assistance program under section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f).
(2) Standards for materials
The Secretary, in consultation with the advisory committee established under subsection
(g)(4) 1 of the Department of Housing and Urban Development Act, shall establish standards for
materials and forms to be used, as appropriate, by organizations providing homeownership
counseling services, including any recipients of assistance pursuant to subsection (a)(4).
(3) Mortgage software systems
(A) CertificationThe Secretary shall provide for the certification of various computer software
programs for consumers to use in evaluating different residential mortgage loan proposals. The
Secretary shall require, for such certification, that the mortgage software systems take into
account—
(i)
the consumer’s financial situation and the cost of maintaining a home, including insurance,
taxes, and utilities;
(ii)
the amount of time the consumer expects to remain in the home or expected time to maturity
of the loan; and
(iii)

such other factors as the Secretary considers appropriate to assist the consumer in evaluating
whether to pay points, to lock in an interest rate, to select an adjustable or fixed rate loan, to
select a conventional or government-insured or guaranteed loan and to make other choices
during the loan application process.
If the Secretary determines that available existing software is inadequate to assist consumers
during the residential mortgage loan application process, the Secretary shall arrange for the
development by private sector software companies of new mortgage software systems that
meet the Secretary’s specifications.
(B) Use and initial availability
Such certified computer software programs shall be used to supplement, not replace, housing
counseling. The Secretary shall provide that such programs are initially used only in connection
with the assistance of housing counselors certified pursuant to subsection (e).
(C) Availability
After a period of initial availability under subparagraph (B) as the Secretary considers
appropriate, the Secretary shall take reasonable steps to make mortgage software systems
certified pursuant to this paragraph widely available through the Internet and at public
locations, including public libraries, senior-citizen centers, public housing sites, offices of public
housing agencies that administer rental housing assistance vouchers, and housing counseling
centers.
(D) Budget compliance
This paragraph shall be effective only to the extent that amounts to carry out this paragraph are
made available in advance in appropriations Acts.
(4) National public service multimedia campaigns to promote housing counseling
(A) In general
The Director of Housing Counseling shall develop, implement, and conduct national public
service multimedia campaigns designed to make persons facing mortgage foreclosure, persons
considering a subprime mortgage loan to purchase a home, elderly persons, persons who face
language barriers, low-income persons, minorities, and other potentially vulnerable consumers
aware that it is advisable, before seeking or maintaining a residential mortgage loan, to obtain
homeownership counseling from an unbiased and reliable sources [2] and that such
homeownership counseling is available, including through programs sponsored by the Secretary
of Housing and Urban Development.
(B) Contact information

Each segment of the multimedia campaign under subparagraph (A) shall publicize the toll-free
telephone number and website of the Department of Housing and Urban Development through
which persons seeking housing counseling can locate a housing counseling agency in their State
that is certified by the Secretary of Housing and Urban Development and can provide advice on
buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.
(C) Authorization of appropriations
There are authorized to be appropriated to the Secretary, not to exceed $3,000,000 for fiscal
years 2009, 2010, and 2011, for the development, implementation, and conduct of national
public service multimedia campaigns under this paragraph.
(D) Foreclosure rescue education programs
(i) In generalTen percent of any funds appropriated pursuant to the authorization under
subparagraph (C) shall be used by the Director of Housing Counseling to conduct an education
program in areas that have a high density of foreclosure. Such program shall involve direct
mailings to persons living in such areas describing—
(I)
tips on avoiding foreclosure rescue scams;
(II)
tips on avoiding predatory lending mortgage agreements;
(III)
tips on avoiding for-profit foreclosure counseling services; and
(IV)
local counseling resources that are approved by the Department of Housing and Urban
Development.
(ii) Program emphasis
In conducting the education program described under clause (i), the Director of Housing
Counseling shall also place an emphasis on serving communities that have a high percentage of
retirement communities or a high percentage of low-income minority communities.
(iii) Terms definedFor purposes of this subparagraph:
(I) High density of foreclosures
An area has a “high density of foreclosures” if such area is one of the metropolitan statistical
areas (as that term is defined by the Director of the Office of Management and Budget) with
the highest home foreclosure rates.

(II) High percentage of retirement communities
An area has a “high percentage of retirement communities” if such area is one of the
metropolitan statistical areas (as that term is defined by the Director of the Office of
Management and Budget) with the highest percentage of residents aged 65 or older.
(III) High percentage of low-income minority communities
An area has a “high percentage of low-income minority communities” if such area contains a
higher-than-normal percentage of residents who are both minorities and low-income, as
defined by the Director of Housing Counseling.
(5) Education programs
The Secretary shall provide advice and technical assistance to States, units of general local
government, and nonprofit organizations regarding the establishment and operation of,
including assistance with the development of content and materials for, educational programs
to inform and educate consumers, particularly those most vulnerable with respect to
residential mortgage loans (such as elderly persons, persons facing language barriers, lowincome persons, minorities, and other potentially vulnerable consumers), regarding home
mortgages, mortgage refinancing, home equity loans, home repair loans, and where
appropriate by region, any requirements and costs associated with obtaining flood or other
disaster-specific insurance coverage.
(h) DefinitionsFor purposes of this section:
(1) Nonprofit organization
The term “nonprofit organization” has the meaning given such term in section 12704(5) of title
42, except that subparagraph (D) of such section shall not apply for purposes of this section.
(2) State
The term “State” means each of the several States, the Commonwealth of Puerto Rico, the
District of Columbia, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin
Islands, American Samoa, the Trust Territories of the Pacific, or any other possession of the
United States.
(3) Unit of general local government
The term “unit of general local government” means any city, county, parish, town, township,
borough, village, or other general purpose political subdivision of a State.
(4) HUD-approved counseling agencyThe term “HUD-approved counseling agency” means a
private or public nonprofit organization that is—
(A)

exempt from taxation under section 501(c) of title 26; and
(B)
certified by the Secretary to provide housing counseling services.
(5) State housing finance agency
The term “State housing finance agency” means any public body, agency, or instrumentality
specifically created under State statute that is authorised to finance activities designed to
provide housing and related facilities throughout an entire State through land acquisition,
construction, or rehabilitation.
(i) Accountability for recipients of covered assistance
(1) Tracking of fundsThe Secretary shall—
(A)
develop and maintain a system to ensure that any organization or entity that receives any
covered assistance uses all amounts of covered assistance in accordance with this section, the
regulations issued under this section, and any requirements or conditions under which such
amounts were provided; and
(B) require any organization or entity, as a condition of receipt of any covered assistance, to
agree to comply with such requirements regarding covered assistance as the Secretary shall
establish, which shall include—
(i)
appropriate periodic financial and grant activity reporting, record retention, and audit
requirements for the duration of the covered assistance to the organization or entity to ensure
compliance with the limitations and requirements of this section, the regulations under this
section, and any requirements or conditions under which such amounts were provided; and
(ii)
any other requirements that the Secretary determines are necessary to ensure appropriate
administration and compliance.
(2) Misuse of fundsIf any organization or entity that receives any covered assistance is
determined by the Secretary to have used any covered assistance in a manner that is materially
in violation of this section, the regulations issued under this section, or any requirements or
conditions under which such assistance was provided—
(A)

the Secretary shall require that, within 12 months after the determination of such misuse, the
organization or entity shall reimburse the Secretary for such misused amounts and return to
the Secretary any such amounts that remain unused or uncommitted for use; and
(B)
such organization or entity shall be ineligible, at any time after such determination, to apply for
or receive any further covered assistance.
The remedies under this paragraph are in addition to any other remedies that may be available
under law.
(3) Covered assistance
For purposes of this subsection, the term “covered assistance” means any grant or other
financial assistance provided under this section.
(Pub. L. 90–448, title I, § 106, Aug. 1, 1968, 82 Stat. 490; Pub. L. 91–609, title IX, § 903(a), (b),
Dec. 31, 1970, 84 Stat. 1808; Pub. L. 93–383, title VIII, § 811, Aug. 22, 1974, 88 Stat. 735; Pub. L.
95–128, title IX, § 903, Oct. 12, 1977, 91 Stat. 1149; Pub. L. 97–35, title III, § 339A, Aug. 13,
1981, 95 Stat. 417; Pub. L. 98–181, title I [title IV, § 465], Nov. 30, 1983, 97 Stat. 1236; Pub. L.
98–479, title II, § 204(f), Oct. 17, 1984, 98 Stat. 2233; Pub. L. 100–242, title I, § 169, Feb. 5,
1988, 101 Stat. 1865; Pub. L. 100–628, title X, § 1009, Nov. 7, 1988, 102 Stat. 3266; Pub. L. 101–
137, § 8, Nov. 3, 1989, 103 Stat. 826; Pub. L. 101–625, title V, § 577, title VII, § 706(c), Nov. 28,
1990, 104 Stat. 4238, 4286; Pub. L. 102–550, title I, § 162(a)–(d), Oct. 28, 1992, 106 Stat. 3719–
3721; Pub. L. 104–316, title I, § 106(a), Oct. 19, 1996, 110 Stat. 3830; Pub. L. 105–276, title V,
§ 594(a), (b), Oct. 21, 1998, 112 Stat. 2655; Pub. L. 107–73, title II, § 205, Nov. 26, 2001, 115
Stat. 674; Pub. L. 109–163, div. A, title VI, § 688(a), Jan. 6, 2006, 119 Stat. 3336; Pub. L. 110–
289, div. B, title I, § 2127, July 30, 2008, 122 Stat. 2841; Pub. L. 111–203, title XIV, §§ 1443–
1445, 1448, 1449, July 21, 2010, 124 Stat. 2165–2171, 2173, 2174.)