How a HUD-approved housing counselor can help you buy
Buying your first home means learning a whole new language. You’ll discover the joy of escrow, points, DTI, and PMI, to name just a few topics. However, you don't have to figure it out alone. HUD-approved housing counselors offer free or low-cost guidance to help you.
Key takeaways
- HUD-approved housing counselors work for nonprofit agencies approved by the Department of Housing and Urban Development.
- They offer one-on-one coaching and homebuyer education classes, often for free or a small fee.
- Many down payment assistance programs and some loans require a homebuyer class, and a counselor can help you meet that.
- Counselors don't sell loans or homes, so their advice is focused on you.
HUD-approved housing counselors have to pass a HUD certification exam, and the agencies need to meet HUD standards. Many have helped people buy homes for decades.
What can a housing counselor do for you?
- Review your finances: A counselor can look at your income, debts, savings, and spending and help you figure out what you can afford.
- Help with your credit: They'll go over your credit report with you and help you build a plan to improve it.
- Make a plan: If you're not ready to buy yet, a counselor can give you a step-by-step plan with goals and a timeline.
- Explain your loan options: They can walk you through government and conventional loans and help you understand which might fit.
- Find assistance programs: Counselors usually know the local down payment and closing cost assistance programs, including ones that are hard to find online.
- Review your paperwork: Once you're working with a lender, a counselor can help you understand your estimate and compare offers.
Homebuyer education classes
Most agencies offer homebuyer education classes, in person or online. They cover the whole process, from budgeting and credit to shopping for a home, getting a mortgage, and maintaining your home after you move in.
Classes often last six to eight hours, sometimes split over several sessions. When you finish, you'll get a certificate. Many down payment assistance programs require one, and some low-down-payment loans require homebuyer education for first-time buyers. Check that your lender accepts the class you take before you sign up.
What it costs
One-on-one counseling is usually free. Some agencies charge a fee for classes, and plenty of them offer reduced costs for people who can't afford them. Ask that upfront.
How to find a counselor
You can search for a HUD-approved agency near you on HUD's website or the Consumer Financial Protection Bureau's website. You can also call HUD's housing counseling line at 1-800-569-4287.
When you contact an agency, ask:
- Are you HUD-approved?
- Do you offer pre-purchase counseling and homebuyer classes?
- Is there a cost?
- Do you work with local down payment assistance programs?
Counseling help continues after your purchase
The same agencies can help after you move in, too. If you ever fall behind on your mortgage, many offer free foreclosure prevention counseling and can help you talk with your lender.
How do counselors differ from other people in the process?
Lenders want to make a loan. Real estate agents are usually paid when a sale closes. A housing counselor doesn't earn money from your loan or your purchase. That makes them a good second opinion when you're weighing those decisions.
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Related FAQs
Common questions about this topic, answered simply.
Do I need a housing counselor to buy a home?
No, but it can help. Some assistance programs and loans do require a homebuyer class.
Can a counselor help if I'm years away from buying?
Yes, plenty of people start counseling a year or more ahead to work on credit and savings.
Can I meet with a counselor by phone or online?
Yes, most agencies offer phone and video appointments and online classes, so you don't need an office nearby.
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