Homeownership Education & Counseling

For many buyers, the process of purchasing a home can seem complicated and overwhelming. There are also buyers who feel ready to purchase a home but in reality may not be financially ready. Time spent in a homebuyer education class or with a HUD certified housing counselor can help a buyer understand the process and reach a position of being mortgage-ready. REALTORS® can refer the potential buyer to a HUD certified housing counselor who has the tools and expertise to help the client resolve financial problems, determine actual household needs, and work on a budget and spending plan and an action plan that begins to prepare the buyer to meet the financial requirements of his or her new home. After working with a housing counselor, the client can return to the REALTOR® and begin looking in earnest for the right home.

Political Advocacy

What is the fundamental issue?

There are some who believe that housing counseling can help to ensure that first-time buyers are adequately prepared for homeownership. There has been movement toward creating programs that incentivize borrowers with a reduction in mortgage insurance if they complete a series of housing counseling requirements.

I am a real estate professional. What does this mean for my business?

Homeownership education and counseling provides potential buyers with tools and information to help them make housing choices that are affordable and sustainable. Studies suggest that buyers who participate in education and counseling programs are less likely to experience mortgage delinquencies and foreclosures. In addition an educated buyer can help make the home buying process go more smoothly for the REALTOR® and the lender. Potential buyers may be more likely to opt-into counseling programs if they are offered a financial incentive to do so.

NAR Policy:

NAR does not have written policy related to housing counseling and incentives; however, NAR is supportive of voluntary home buyer education and counseling programs.

Legislative/Regulatory Status/Outlook

NAR is supporting legislation that would lower an FHA borrower's mortgage insurance premiums once they have completed a housing counseling program. These bills, each called the ‘‘Housing Financial Literacy Act of 2021" are S. 1490, sponsored by Senators Peters (D-MI) and Senator Cornyn (R-TX), and H.R. 1395, sponsored by Rep. Beatty (D-OH). These bills will help homebuyers gain a greater understanding of mortgage and homeownership responsibilities while improving housing affordability. FHA’s current premiums are significantly higher than what is necessary to cover the risks of losses, and NAR strongly supports efforts to reduce FHA premiums. H.R. 1395 passed the House under Suspension of the Rules in April of 2021. NAR continues to advocate for these bills in the Senate.

NAR Committee:

Housing Opportunity Committee