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CHAPTER 2. OBTAINING HUD APPROVAL

2-1 Approval Criteria. HUD will accept applications from national,
multi-

State, regional, and local entities. Applicants with branch offices or

affiliate member organizations over which the primary entity exercises

some control regarding services rendered, and the quality of those

services, may submit a single application for approval of the primary

entity and its branches or affiliates. The branches or affiliates must

meet the primary entity\'s standards as well as those in this handbook.

An applicant agency with branch offices or affiliates must provide a

written delineation of the responsibilities of the parent organization

and its branches or affiliates.

The following approval criteria apply to all applicants. Each branch or

affiliate included in an approval application must satisfy these

criteria.

A. Nonprofit Status. An applicant and its branches or affiliates for

approval must function as private or public nonprofit

organizations. The applicant must submit evidence of nonprofit

status as demonstrated by section 501(c) (3) of the Internal

Revenue Code approval (or pending approval) to support its

nonprofit status and that of its branches or affiliates.

B. Community Base. The applicant or its branches and affiliates must

have functioned for at least one year in the geographical area that

the applicant proposes for itself or its branches or affiliates to

serve as a HUD-approved housing counseling agency or agencies.

C. Experience. The applicant must have successfully administered a

housing counseling program for at least one year.

D. Audit. The applicant must have had an independent audit of its

financial records during the twelve months preceding the date of

applying for HUD approval. An applicant must submit with its

approval application a copy of the most recent auditor\'s report.

An applicant with branches or affiliates with accounting

independent of the applicant must provide written assurance that

those branches or affiliates meet this criterion.

NOTE: A national, regional, or multi-State applicant whose

latest audit does not meet this timeliness criterion may

receive a conditional approval. HUD will grant

conditional approval if the applicant agrees in

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writing to contract for the completion of the required

audit within six months of their application for

approval.

E. Recordkeeping and Reporting. The applicant and its branches or

affiliates must have an established system of recordkeeping so that

data can easily be reported to HUD and reviewed by HUD in relation

to housing counseling services. See chapter 4.

F. Counseling Resources. The applicant and its branches or affiliates

must have sufficient resources to implement the proposed counseling

plan no later than the date of HUD approval.

1\. Funding. The application for approval must provide evidence

of funds on hand or a written commitment for funds to cover

the cost of operating the proposed counseling plan during the

initial twelve-month period of HUD approval This includes the

availability of funds for branches and affiliates. Applicants

that plan to charge counseling fees must comply with chapter

6 of this handbook. (HUD approval neither includes nor

guarantees HUD funding in the future.)

2\. Staff. The applicant and its branches or affiliates must

employ staff trained in housing counseling with at least six

months experience in the job they will perform in the

counseling program.

3\. Language Skills. Counselors must be fluent in the language of

the clients they serve, or the counseling agency must use the

services of an interpreter.

G. Knowledge of HUD Programs and Local Housing Market. The applicant\'s

housing counseling staff, including those in branches and

affiliates, must possess a working knowledge of HUD housing

programs (including public housing), the housing programs available

in the community, and the local housing market.

A working knowledge means that a counselor can inform the client in

detail regarding what housing is available for which the client is

eligible, how the client applies for the housing, and the rights

and responsibilities of all parties involved in particular housing

transactions\--leases, mortgages, notes, contracts, etc.

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K. Subagreements. The applicant, its branches or affiliates, must

deliver all of the counseling activities set forth in the

applicant\'s counseling plan. Subcontracting with other entities is

permitted ONLY in geographical areas where no HUD-approved housing

counseling agency exists; however, the subcontractor must meet the

HUD-approval eligibility standards in this handbook. This does not

prevent an approved agency from referring clients to other

community resources for assistance.

National, regional, and multi-State entities may enter into

subagreements with their branches or affiliates to provide

counseling services. The \"agreements\" may simply be an exchange of

letters which also delineate the respective housing counseling

program responsibilities of the parent organization and its

branches or affiliates.

I. Community Resources. The applicant, or its branches or affiliates,

must have established working relationships with private and public

community resources to which it can refer clients who need help the

agency cannot offer.

J. State and Local Requirements. The applicant, including its

branches or affiliates, must meet all State and local requirements

for its operation.

K. Facilities. The counseling facilities of the applicant or its

branches or affiliates must meet the following criteria.

1\. Located in the community of the target population.

2\. Provide privacy for all one-on-one sessions between a

counselor and a client.

3\. Public transportation is within easy walking distance (15

minutes) of the applicant\'s location, except for rural or

distant suburban locations.

4\. Operating hours include regular work hours and days, and other

hours and days when necessary to meet the needs of working

clients.

5\. Ease of access for disabled and elderly persons, or be willing

to meet with such persons at an alternative accessible

location.

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L. Assurances. The application must include the assurances set forth

on Form HUD-9900A or 9900C, application for HUD approval as a

housing counseling agency. See Appendix 1A, page 2 of 4, or

Appendix 2, page 4 of 10. These assurances also apply to branches

and affiliates.

2-2 The Application for Approval Process

A. Local Entities. A local entity may have only one office or a main

office with branch offices in no more than two contiguous States.

An application includes a Preliminary Application, an application

conference, and a Final Application. The Preliminary Application

helps HUD determine if the agency possesses the basic

qualifications to initiate the Final Application process. The

preparation of the Preliminary Application can save the resources

of the applicant and HUD, if HUD determines from the Preliminary

Application that the applicant does not or might not qualify.

B. National, Regional, and Multi-State Entities. This type of entity

serves a large geographical area consisting of the nation or a

majority of its States; a major region of the country, such as the

Southwest or the Northeast; or a group of two or more contiguous

States.

Organizations with branches or affiliates make application to HUD

Headquarters. They submit applications based on Form HUD-9900C

(See Appendix 2.1). Address inquiries and applications to:

Deputy Assistant Secretary for Single Family Housing

U.S. Department of Housing and Urban Development

451 Seventh Street, S.W.

Washington, D.C. 20410

The Housing Counseling staff in Headquarters will process all

applications from these organizations.

NOTE: Applicants that are local entities (not national,

regional, or multi-State) with offices located in more

than one HUD office jurisdiction, see paragraph 2-6

below.

2-3 Application Log. The HUD office will maintain a log for recording
the

receipt of applications as well as all actions relating to processing

the applications. See Appendix 21, Processing Log: Application for HUD

Approval as a Housing Counseling Agency.

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A. Application Forms

1\. Local Entities Use Form HUD-9900A, Preliminary Application for

HUD Approval as a Housing Counseling Agency. Appendix 1

contains a sample of this form. If HUD approves the

preliminary application, the applicant then uses Form HUD-

9900B to prepare its final application. See Appendix 1.

2\. National, Regional, and Multi-State entities use only

Form HUD-9900C, Application for HUD Approval as a Housing

Counseling Agency.

B. The HUD Field Office reviews the Preliminary Application. The

office will send a written acknowledgement to the applicant agency.

Within thirty days of its receipt of an application, the office

will review it, determine if the applicant meets the initial

approval criteria required under this part of the application, and

notify the applicant agency under subparagraph a. or b. below. Use

Form
[HUD-9904](http://www.hud.gov/utilities/intercept.cfm?/offices/adm/hudclips/forms/files/9904.pdf),
Checklist for Review of An Application for HUD

Approval - Preliminary Application. See Appendix 3.

1\. Approval. HUD will notify the applicant by letter or

a telephone call and arrange for a preapplication conference

with the applicant. Paragraph B2-4 below describes the

conference.

2\. Disapproval. HUD will notify the applicant by a letter

that sets forth the reasons why the applicant does not meet

the approval criteria. The applicant may submit a revised

Preliminary Application or appeal HUD\'s decision by addressing

a letter to the HUD office that reviewed the applicant\'s

Preliminary Application. See Chapter 8 regarding appealing a

negative decision.

Note 1: If the applicant agency does not receive from HUD

an acknowledgement of receipt of the preliminary

application within 15 days of submitting it, the

applicant should communicate with the HUD office to

determine if HUD received the document.

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Note 2: If the applicant agency does not receive from HUD the

approval or disapproval message within 45 days of

submission of the preliminary application, the applicant

should contact the Single Family Director in the local

HUD office and request prompt resolution of the

application.

2-4 Pre-Final Application Conference with Local Entities. Before HUD
will

process the Final Application from a local entity, the applicant must

have a conference\--preferably at the applicant\'s office\--with the HUD

office staff. The HUD office will arrange for the conference within 30

days of its receipt of the preliminary application.

HUD may waive this location requirement if the HUD office lacks travel

funds or staff travel time to devote to the conference. Under that

condition, the HUD office will hold the conference at its office;

however, in lieu of the face-to-face conference in the HUD office, the

applicant may request HUD to arrange for a conference call with the

applicant\'s staff at HUD expense.

During the conference or conference call, the HUD staff will do the

following to assist the applicant.

A. Review of the Preliminary Application with the applicant

B. Furnish information and guidance to the applicant regarding the

preparation of the Final Application

C. Answer questions, if any, about this handbook and its attachments

D. Identify training needed by the applicant\'s staff to meet the

criteria in para. 2-2

E. Answer questions from the applicant

2-5 Final Application Submission Process for Local Entities and
Application

Process for National, Regional, and Multi-State entities.

A. The local applicant completes and submits its Final Application for

HUD Approval as a Housing Counseling Agency, Form HUD-9900B, after

the conference. HUD must receive the Final Application no later

than ninety days after the conference; otherwise, a new conference

should be held. Appendix 2 contains a sample of the Final

Application form.

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B. National, regional, and multi-State applicants submit Form HUD-

9900C.

C. HUD Reviews the Final Application from a Local Entity and the

Application from a National, Regional, or Multi-State Applicant.

1\. Timing. The HUD office will review the application within

thirty days of its receipt. Within 45 days HUD will notify

the applicant of HUD\'s decision regarding the acceptability of

the Final Application.

Note: If the applicant does not receive either the

acknowledgement letter or the approval/disapproval

letter from HUD within ten days of the relevant times set

forth in the above paragraph, the applicant agency should

contact the HUD office.

2\. Responsibility. The HUD office performs the review and sends

a decision letter to the applicant.

3\. Criteria. The HUD office uses Form
[HUD-9904](http://www.hud.gov/utilities/intercept.cfm?/offices/adm/hudclips/forms/files/9904.pdf),
Checklist for

Review of Application for HUD Approval as a Housing Counseling

Agency. See Appendix 3. The applicant may use this checklist

to determine the completeness of its application; however, the

applicant does NOT include its checklist with its application.

4\. Approval/Disapproval Decision

a\. Approval. HUD\'s approval must be unconditional; i.e.,

the applicant must fully meet the requirements of this

handbook. The only exception is the audit requirement.

Applicants that do not have audits conducted within the

12-month period immediately preceding the date on which

they send their application to HUD, must submit a written

statement to the effect that the applicant will contract

for an audit no later that six months after HUD grants

approval conditioned upon the completion of an audit.

The agency must furnish a copy of the audit to the GTR in

the local HUD office in a timely manner.

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b\. A letter of approval is prepared by the HUD office and

sent to the applicant agency. See Appendix 4 for a

sample letter.

c\. A letter of disapproval is prepared in which the

reviewing office specifies the aspects of the applicant\'s

application that do not meet HUD\'s requirements. See

Appendix 5 for a sample letter.

D. Upon receipt of a letter of approval, the applicant signs and dates

the \"Approval Accepted\" lines on the letter and returns it to the

HUD office.

E. HUD issues a Certificate of HUD Approval as a Housing Counseling

Agency, Form HUD-9915, to the applicant. The Single Family Director

in the local HUD Office is responsible for notifying the Office of

the Deputy Assistant Secretary for Single Family Housing. Use the

formats in Appendices 6 and 7. This form is available in a

WordPerfect file upon request to the Housing Counseling Program

Staff in Headquarters. Make such a request via cc mail. The file

permits field staff to type in the information regarding the

approved agency and print a copy for delivery to the agency.

F. Upon receipt of a letter of disapproval, the applicant may appeal

the decision by writing to the HUD office that disapproved the

application or may submit a revised application. If an applicant

decides to submit a revision, the applicant should consult the HUD

office in advance. Local entities may appeal to the Deputy

Assistant Secretary for Single Family Housing at HUD Headquarters

ONLY AFTER the applicant makes an appeal to the original reviewing

office. National, Regional, and Multi-State organizations send

their appeals to the Assistant Secretary for Housing-FHA

Commissioner.

2-6 Local Entities Located in One or Two States. HUD offices
occasionally

receive applications for approval from local entities located in one or

two States with branch offices located in other HUD office

jurisdictions. This section provides instructions for processing an

application that falls within this type of situation.

A. Processing Applications that Cross HUD Office Jurisdictions. This

process reduces to a minimum effort required on the part of the

applicant entity and HUD. Implementing the process will require

maximum cooperative effort by the entity and HUD as well as between

or among HUD offices.

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1\. HUD Offices that Receive Preliminary Applications. The HUD

office that receives a preliminary application (Form HUD-

9900A) will assure that the main office of the applicant

entity is located within the geographical jurisdiction of that

HUD office.

a\. If that is true, the office will process the preliminary

application in accordance with paragraph 2-3 of this

handbook.

b\. If the applicant\'s main office is not located within the

recipient office\'s jurisdiction, that office will forward

the application to the correct HUD office and promptly

notify the applicant in writing or by telephone.

c\. The HUD office that receives the application is not

required, at this stage of the application process, to

notify any other HUD office that might be affected by an

acceptable final application for approval; however, the

recipient office may, at its discretion, alert other

affected offices regarding the receipt of the preliminary

application.

2\. HUD Offices that Receive Final Applications. The HUD office

that receives a final application (Form HUD-9900B) from an

entity that submitted an acceptable preliminary application

(Form HUD-9900A) will process the final application in

accordance with paragraph of Handbook 7610.1. Do NOT process

a final application unless you received an acceptable

preliminary application.

a\. Unacceptable Final Application. If your office never

approves a final application, no further action is

required of your office.

b\. Acceptable Final Application. If your office approves a

final application, do NOT send the approval letter to the

applicant until you complete the following steps,

3\. Notification to Affected HUD Offices

a\. Notify, in writing, each HUD office within which the

applicant has one or more branch offices that you have

tentatively approved the applicant and its branch

offices, if any.

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b\. Include in your notice to the HUD office or offices a

copy of the applicant\'s preliminary and final

applications for optional review by those offices.

B. Application Review Options by Affected HUD Offices. Your office may

take the actions indicated in EITHER paragraph 1 or 2 below.

1\. Review the preliminary and final applications in accordance

with paragraph 2-3 of Handbook 7610.1 and notify the

application recipient HUD office accordingly; however, perform

this review in view of the fact that the recipient office

completed a thorough review. Notify the application recipient

HUD office in writing of your determination to approve or

reject the application. If your office disapproves, indicate

to that office the specific review deficiencies in the

application.

To expedite processing, your office may correspond directly

with the applicant regarding the correction of application

deficiencies; however, keep the application recipient office

informed of your actions. You may perform this latter activity

by telephone.

2\. Accept the review by the application recipient HUD office

without further review by your office; HOWEVER, your office

must visit or consult by telephone with the applicant

regarding the agency\'s site to assure its compliance with

paragraph K., Facilities, of Handbook 7610.1. Provide written

acceptance to the application recipient office.

C. Monitoring HuD-Approved Housing Counseling Agencies with Branches

that cross HUD Jurisdictions. The HUD office that approved the

agency is responsible for monitoring the agency.

2-7 Reapproval or Disapproval After a Biennial Performance Review. The
HUD

office must conduct a Biennial Performance Review for each of the

office\'s approved agencies. Chapter 5 describes the review and the

terms of reapproval or disapproval of an agency.

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2-8 Terminations of Approvals and Grants

A. Approvals

1\. HUD may withdraw the Certificate of Approval at any time for

any or all of the following reasons.

a\. at the convenience of the government

b\. agency fails to maintain its compliance with program

requirements

c\. agency fails to implement, in whole or in part, the

agency\'s approved counseling plan.

2\. The agency may withdraw from the program at any time. If an

agency that has a HUD grant terminates its approval, that

action also terminates the grant. Under a grant, the agency

will not receive payments from HUD for any counseling

activities after the date on which the agency cancels the

approval.

3\. Termination by HUD and withdrawal by an agency must be in

writing.

4\. When termination occurs or withdrawal occurs, the agency must

return to HUD any unexpired certificate of approval. A

TERMINATED AGENCY MUST NOT DISPLAY A CERTIFICATE OF HUD

APPROVAL. By accepting HUD approval, an agency implicitly

agrees not to display a certificate of approval after

termination of the approval or withdrawal from the program.

B. Grants. Termination is governed by the terms of the grant

agreement. ONLY THE GRANT OFFICER MAY TERMINATE A GRANT ON BEHALF

OF HUD.

2-9 Agency Information Changes (See and use Appendix7.)

A. An approved agency must notify the HUD Field Office in writing any

time the agency:

1\. Loses its nonprofit status

2\. No longer complies with local and State requirements

3\. Changes any of these items

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a\. location of any of its HUD-approved offices

b\. staff person responsible for the counseling program

c\. address or telephone number

d\. ZIP Code Areas from which it has or has not received

clients over the past 12-month period (to add or delete

ZIP Codes)

e\. any other aspect of its purpose or function that impairs

its ability to comply with this handbook or, if the

agency is under a grant from HUD, the grant agreement

Send the notification to the HUD Field Office within fifteen days

of any of the above occurrences so that correct referrals may be

made as appropriate and correspondence on program matters promptly

received.

B. The HUD Field Office, upon receipt of a notice of any of the above

factors, must assure that the following persons receive copies of

the notice. Use the format in Appendix 7 for this purpose.

1\. Field Office staff person responsible for the counseling

program

2\. Government Technical Representative in the and the Government

Technical Monitor in the Field Office

3\. Deputy Assistant Secretary for Single Family Housing in

Headquarters

2-10 Training

A. HUD\'s Responsibility. HUD will provide training to HUD-approved

housing counseling agencies regarding HUD programs applicable to

the agency\'s counseling program. The availability of training

depends on these factors.

1\. Availability of HUD Resources. The ability of HUD to provide

training depends upon available staff time and travel funds.

For this reason, advance planning is essential.

2\. Training Funds. Generally, HUD does not have funds to pay

participating agency staff travel and per diem costs. If

training funds become available, HUD will notify all HUD-

approved housing counseling agencies.

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3\. Location of Training. Unless HUD has staff time and travel

funds available to provide training in various locations,

training will take place at the HUD office.

4\. Each HUD office with approved agencies will conduct a training

needs survey of those agencies during the first quarter of

each fiscal year. The office will use the format of Appendix

18 for this purpose. The office will plan and provide for the

training no later than the end of the fourth quarter of the

fiscal year.

B. Agency Training Needs and Requests

1\. HUD does not have the resources to train individual housing

counselors on a one-to-one basis; however, HUD will make

available, upon request from any agency, its program

publications. Send written requests to the HUD office that

services your area.

2\. HUD may provide training to a group of agency staff.

Generally, this will require at least five participants

interested in the same program(s).

3\. Identifying and Meeting Training Needs. A HUD-approved

housing counseling agency or a group of agencies may request

training at any time. Please use the format in Appendix 18

for this purpose. If a group request is made, one agency

should coordinate the request and submit a combined request on

the format of Appendix 18.

C. Reports by HUD Field Offices. Each Field Office will submit the

following information in the format in Appendix 19, Report of

Training Needs Survey and Provision of Training, to the Deputy

Assistant Secretary for Single Family Housing, Attention Housing

Counseling Staff by October 30 of each year. The report covers the

HUD fiscal year.

D. Agencies Responsibility. Approval of an agency by HUD indicates

that the agency has trained and experienced staff; however, as HUD

and other housing programs and agency staff change, the need for

training arises. Each approved agency is responsible for the

following aspects of training.

1\. Requests training by HUD and other entities under whose

housing programs the agency provides counseling.

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2\. Counseling Skills. HUD expects an approved agency to assure

the upgrading of the counseling skills and techniques of its

housing counseling staff.

3\. Referrals to Community Resources. HUD expects the agency to

assure that its housing counseling staff know about community

resources and how to make referrals of housing counseling

clients to those resources. This includes establishing a one-

to-one rapport with community resources staff.

4\. State and Local Real Estate Laws. HUD expects the agency

housing counseling staff to possess a working knowledge of all

current laws and ordinances that relate to the housing

counseling services it provides to its clients.

5\. Financing Options. HUD expects agency staff to have a

thorough knowledge of all financing options available to its

clients.

6\. Fair Housing Laws. HUD expects agency staff to have a

thorough knowledge of Federal, State, and local fair housing

laws that could affect a clients\' efforts to meet housing

needs or resolve housing problems.

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