From across the network of housing counseling agencies served by Mon Valley Initiative, Dana Hodge II is hearing similar stories—there’s a real-estate boom underway, and it’s pushing low-to-moderate income homebuyers out of the market.
“There are a lot of cash buyers out there who are offering more than the asking price,” says Hodge, who manages MVI’s intermediary program for agencies that receive funding from the U.S. Department of Housing & Urban Development. “Most of the people our agencies work with need loans, or are raising the money to buy a house. That leaves those clients out.”
The COVID-19 pandemic unleashed an “explosion” of homebuying that no one expected, he says. After two years, conditions are finally getting back to normal. “When the pandemic started, if someone was selling their house, they had 20 buyers who had offers above asking price,” Hodge says. “Now they have five to seven offers. One of the questions we have now is—what’s the next year going to look like?”
Helping agencies find their own answers to those questions is just one small role played by MVI’s HUD Intermediary program. Since 2005, MVI has enabled a national network of housing counseling agencies to leverage millions of dollars in HUD assistance.
MVI oversees the completion and submission of federal grant applications for between 15 and 17 agencies from coast to coast, including groups in Delaware, Illinois, Massachusetts, New York, Pennsylvania, Texas, Washington, West Virginia and Wisconsin.
“Our longtime experience of working with HUD has provided us with the ability to understand their requirements, and the nuances of what formats they want to receive information in,” Hodge says. “That’s a big help for agencies. It also gives HUD confidence that agencies are meeting, and exceeding, standards. That’s something we’ve worked hard at.”
MVI’s assistance significantly reduces the administrative burden on small housing counseling agencies, which gives them more time to devote to helping renters, potential homeowners, current homeowners and the homeless. In addition, HUD provides financial incentives—such as increased
grant funding—to encourage agencies to participate in networks.
“HUD has continued to increase its focus on compliance, so that’s caused us to focus on those issues,” Hodge says. For instance, in 2020, HUD required each agency receiving funding to obtain federal certification for their housing counselors. With MVI’s help, all of the participating agencies met the requirement, he says.
Building peer-to-peer relationships to solve problems together is also important, says Hodge, who has managed the HUD intermediary program since 2006.
“Being a smaller agency, we’re constantly in touch with the agencies we serve,” he says. “And we’re starting to use Zoom in ways that we’re hoping will help agencies to meet together to share ideas even while they’re staying in their office. We’re looking forward to working together even more, and really thinking about how to use the technology that’s available.”
Housing counseling services help low-to-moderate income homebuyers who may be seen as less-than-important customers by mortgage lenders and real estate agencies, Hodge says. “Lenders and agents have to do the same amount of work for the person who’s buying a $50,000 house as for a person who’s buying a $500,000 house,” he says. “But which one results in the bigger commission for the real estate agent or the mortgage lender? We’re trying to help agencies do outreach, to say to lenders, ‘Hey—we’re trying to do the heavy lifting for you to make these folks able to qualify for a mortgage.’”
Some tough issues currently face the housing counseling industry, Hodge says. In 2010, according to Zillow, homes for sale spent on average 140 days on the market. In 2019, the time on the market dropped to just 30 days. In 2020, at the height of the pandemic, houses were selling in just 16 days.
Is housing counseling still necessary when the homebuying market is so strong? Hodge says it’s more vital than ever, because first-time buyers are facing increased pressure to make important decisions about their home purchase in shorter periods of time. Housing counseling provides the tools first-time homeowners need to avoid costly mistakes, he says.
“Housing stability is an important goal of housing counseling programs. When Congress created the American Rescue Plan, they included funding for housing counseling. They understand the significance of housing counseling.”
Another issue facing the industry is the lack of new counselors entering the field, Hodge says. “A lot of the housing counselors we work with have been doing this for a long time—20 or 30 years. They’re at the point of retirement. So within the industry—and HUD is helping with this—they are promoting the idea that being a housing counselor is a career path.”
Other changes include a new focus on foreclosure prevention services and outreach to renters, Hodge says, as well as the increased use of streaming-video and conference-calling technology to provide counseling to clients.
As the field evolves and housing counseling agencies face changes and challenges, MVI’s HUD intermediary program will be there for them, Hodge says. “We are both a housing counseling agency and an intermediary, and that helps us relate to the on-the-ground difficulties, and the workloads, they have,” he says. “We’re not giving them guidance and advice from the 30,000-feet level. We’re able to go through the storm with them.”