HUD-approved counseling is mandatory before a HECM can close. 24 CFR 206.41 requires the originator to give a counselor list at first contact. Every borrower, and any non-borrowing spouse HUD’s rules cover, must complete it. The certificate is the output. Jay Zayer, a Certified Reverse Mortgage Professional serving California and Arizona, treats that session as independent education, not a second sales call.
National Housing Act section 255(f) is the statutory counseling mandate. Mortgagee letters update counselor-list and certificate mechanics. The topics still include costs, borrower obligations, and alternatives such as a forward refinance or a sale.
Who must attend and who is not allowed in the room
Borrowers attend. A non-borrowing spouse who will rely on HUD’s deferral protections attends. Adult children may sit in if the counselor allows, but they do not replace the borrower. The originator does not attend. A certificate issued after a joint meeting with the loan officer is the wrong product.
Counselors use HUD’s HECM protocol and a loan-comparison worksheet. Bring a payoff estimate and a tax bill so the worksheet is not fiction.
What California’s extra counseling rules add
Civil Code section 1923.2(j) requires a list of at least ten HUD-approved reverse-mortgage counseling agencies. Section 1923.2(k) then bars a complete application and fees for seven days after the counseling date. Those rules sit on top of 24 CFR 206.41. They do not replace it.
Arizona uses the federal list requirement without the ten-agency Civil Code overlay and without the seven-day freeze. The counseling content is still HUD’s.
Counseling typically costs $125–$175, paid to the agency. Some agencies still discuss hardship waivers; confirm that when you book rather than assuming a waiver. The certificate is the document the lender must see. Finding the agency is covered on how to find a counselor.
How to use the session instead of enduring it
Ask the counselor to walk through occupancy, property charges, and what happens at death. Ask whether a LESA is likely given your residual income. Ask how a sale compares if the principal limit barely covers the payoff. Take notes. The originator should match those notes later, not argue with them.
After the certificate, the next mechanical page is how the loan proceeds. If eligibility is still in question, go to who qualifies.
What does the two-hour protocol actually walk through?
HUD’s HECM counseling protocol is a scripted education session, not a credit-approval meeting. National Housing Act section 255(f) is why the session exists. 24 CFR 206.41 is why the lender cannot skip it. Typical coverage includes the difference between a HECM and a forward loan, the 2.00% initial MIP and 0.50% annual MIP in Mortgagee Letter 2017-12, the first-year disbursement cap in 24 CFR 206.25, occupancy and property-charge duties, and what heirs face after a due-and-payable event under 24 CFR 206.27(c) and 206.125.
Bring a payoff estimate and a tax bill so the comparison worksheet is not fiction. If you already know you might sell in a year, say that. MIP is a poor fee for a short stay, and the counselor should say so.
- The counselor confirms who must be present: every borrower, and any Eligible Non-Borrowing Spouse who will rely on 24 CFR 206.55.
- You review costs, including origination under 24 CFR 206.31, without treating the worksheet as a locked quote.
- You review alternatives: keeping the forward loan, a HELOC, a sale, or doing nothing.
- The certificate is issued. In California, Civil Code section 1923.2(k) then blocks a complete application for seven days.
This session does not help a household that wants the originator to “just handle counseling.” Independence is the point. It does not help someone who sends a child in their place. The borrower has to complete it. It does not help a file that will fail on property type; screening a manufactured home or an unapproved condo before you pay $125–$175 is cheaper than a wasted certificate.
What can go wrong: the certificate omits a spouse, the address is the wrong house, or 180 days lapse while a condo project stalls. You counsel again. Paying the fee a second time is cheaper than a declined case number. See what the certificate must show.
A follow-up people ask next: can you switch agencies after a bad session? Yes. Book another HUD-approved counselor and complete a new session. The new certificate’s date controls California’s seven-day wait and the 180-day shelf life. The first session is not a life sentence. It is also not a reason to skip the protocol the second time. Bring the same payoff and tax bill so the new worksheet is not fiction either. The originator still stays out of both rooms. A session you cannot hear, or cannot follow in your language, is not useful education even if a certificate prints. Ask about language capacity when you book, not after you hang up. Arizona files skip Civil Code 1923.2(k) and still need this federal session.