Reed Announces $239,000 in Housing Counseling Assistance
PROVIDENCE, RI – In an effort to help Rhode Islanders find suitable housing and avoid foreclosure scams, U.S. Senator Jack Reed (D-RI) today announced that Rhode Island is receiving $239,813 in federal housing counseling funds. Rhode Island Housing will receive $221,264 and the Providence Housing Authority will receive $18,549 to help give Rhode Islanders a greater opportunity to find housing or help distressed homeowners avoid foreclosure. The federal funds may be used to help homebuyers and homeowners realistically evaluate their readiness for a home purchase, understand their financing and downpayment options, and navigate what can be an extremely confusing and difficult process. They also provide assistance to renters and the homeless, and offer financial literacy training to individuals and families.
“This federal funding will help people find a home and help prevent families from losing their homes,” said Reed, who has championed federal support for housing counseling programs. “These housing counseling programs boost responsible, sustainable homeownership and protect both individuals and communities from some of the negative costs of foreclosure."
According to a study by the Mortgage Bankers Association, potential homeowners who participate in pre-purchase education and counseling programs may be more likely to pay their mortgages on time and those who participate in default counseling are more likely to have their loans modified.
Rhode Island Housing will use grant funds to provide a network of support services for pre-purchase, post-purchase, financial literacy, and rental counseling services that also includes group education. This year’s grant also provides much needed support for foreclosure prevention. Rhode Island Housing will provide funding to its HelpCenter branch and the Housing Network of Rhode Island, to support the provision of these comprehensive services.
The federal counseling funds may also be used to combat predatory lending by helping borrowers review their loan documentation and avoid potential mortgage scams, unreasonably high interest rates, inflated appraisals, unaffordable repayment terms, and other conditions that can result in a loss of equity, increased debt, default, and even foreclosure. Likewise, foreclosure prevention counseling helps homeowners facing delinquency or default employ strategies, including expense reduction, negotiation with lenders and loan servicers, and loss mitigation, to avoid foreclosure. With foreclosures still at critical levels in Rhode Island and nationwide, these services are a lifeline for many families.