Client Action Plan Guide

The housing counseling Client Action Plan is a tool that is helpful to the client and the housing counselor because it states what the agency and the client will do to resolve the client's housing need or problem. This guidebook is designed to provide guidance on how to establish and use the Client Action Plan.

 

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Overview

The Client Action Plan outlines what the housing counseling agency (HCA) and the client will do to meet the client’s housing goals and, when appropriate, addresses the client’s housing problems. Successful housing counseling requires collaboration between the counselor and the client that helps achieve a client’s housing goal. Using a Client Action Plan to set goals and expectations early in the counseling process can help a housing counseling agency avoid providing lengthy, ineffective services that frustrate clients and counselors alike.

HUD requires housing counseling agencies participating in its Housing Counseling Program to create a Client Action Plan for all counseled clients except those receiving reverse mortgage counseling. It is important to note that the Client Action Plan is not the same as the agency’s housing counseling work plan.

Components

A Client Action Plan typically includes:

  • Client needs and goals
  • Steps the client and counselor will take to address housing goals
    • The financial analysis and budget review documents can be a starting point for the plan and help determine the specific client steps. The counselor reviews income, expenses, and other factors with the client, and creates a sustainable budget.
    • For more information on how to conduct proper financial analysis, refer to the Financial Analysis Guide.
  • The Client Action Plan often includes referrals to other resources when needed. Information on these products and programs are outlined in the plan along with the method of follow-up. For example, if the client requires job training or legal assistance, the counselor should be able to refer the client to a place where those resources are available. Referrals should include more than one choice for the client when possible, so that the counselor does not steer the client to one agency or provider.

How to Use the Client Action Plan

In order to ensure that the HCA and client are working together towards the client’s housing goal, HUD requires HCAs to complete a Client Action Plan for all counseled clients, except those receiving reverse mortgage counseling.

The Plan must document the type of counseling being provided, such as home purchase or rental counseling. It should include goals, such as saving $100 each month or having down payment funds saved within two years. It is helpful if goals include timelines, such as improving one’s credit score in six months, or eliminating certain debt by the end of the month.

Characteristics of a Quality Client Action Plan

A quality Client Action Plan:

  1. Tailors to the unique financial circumstances, goals, and needs of each client.
  2. Provides referrals to other resources as needed.
  3. Outlines the steps the client and counselor take for addressing and meeting the client’s housing goals.
  4. Clearly identifies what the counselor will do. For example, providing the client with a sample letter to a credit reporting agency to dispute an item on the credit report, submitting the client’s request for loss mitigation to a lender, or contacting the client periodically for updates and adjust the Action Plan if needed.
 

Distribution

A Client Action Plan should be completed at the end of a client’s first counseling session. During this session, the counselor should discern the client’s housing problem or need, understand the borrower’s finances relative to the client’s housing goal, and list the specific steps to be taken in order to achieve the client’s housing goal.

Counselors should clearly indicate the initial steps to be taken by both the counselor and client in order to achieve the client’s housing goal or need. The plan will be amended as needed and should be adjusted over time as client needs or circumstances change. The counselor and client should revisit the plan during follow-up to the initial counseling session and make changes, as necessary.

 

Client File Documentation

Documentation includes the following:

Documentation Description
Copy of the Client Action Plan The Client Action Plan helps to ensure that records are maintained by the agency, as required by HUD. A copy of the Client Action Plan is provided to the client and a second copy is retained in the client file. The Client Action Plan may be signed by the client and/or the counselor. Also, communication may include multiple modalities such as telephonic or virtual.
Financial Analysis and Budget Review The budget review and financial analysis must be kept in the file. These contain financial statements including pay records, credit reports, and other documents needed to conduct this analysis.
Products and programs Documentation on the products and programs to be provided, including options for financing as appropriate, with a minimum of three alternatives (e.g., in pre-purchase for lender products) must be kept in the file. In addition, alternatives, such as multiple lenders of at least three lenders including one that offers FHA products, must be offered if lenders are referred, and other alternative products as necessary.
Referrals to Community Resources If the client needs referrals to other community services, then the resources referred to should be included in the file.
Notes on Progress and Follow-Up As the client makes progress through the steps outlined in the plan, the counselor should follow up with the client, and the file should include notes describing what has been accomplished and notations of changes made to the plan. Counselor financial analysis, notes, and termination should be tracked in logs/worksheets/Client Management Systems (CMS). The counselor should make reasonable efforts to conduct a verbal (in person or via phone) follow-up session within the first 60 days of no client contact.
Notes on Termination and Retention Finally, if goals are met, or if the client ceases making any progress toward their goals for an extended period of time, the counselor may terminate the assistance. The Client Action Plan and notes on why counseling was terminated should be retained with the file for the required three years.
 

Recordkeeping Requirements

One of the most common file deficiencies found in HUD’s audit of HCA client files is a missing or incomplete Client Action Plan. For this reason, agencies may want to standardize Client Action Plan templates.

Supervisors should monitor and ensure Client Action Plans contain:

  • Client file components
  • Identification of housing goals
  • Actions described as specific, with dates, and relate to short- and long-term goals
  • Updates over time
 

Quality Control

Local Housing Counseling Agency Roles and Responsibilities

Characteristics of a quality Action Plan:

  • Tailors to the unique financial circumstances, goals, and needs of each client
  • Provides referrals to other resources as needed
  • Outlines the steps the client and counselor take for addressing and meeting the client’s housing goals
  • Intermediary Roles and Responsibilities

Intermediary Roles and Responsibilities

Intermediaries should ensure that their subgrantees and affiliates are using Client Action Plans effectively and that the plans meet HUD requirements. When reviewing subgrantee and affiliate files, the Intermediaries can use the plan to assist them to determine whether the files are complete.

Intermediaries:

  • Ensure plans are high quality
  • Provide templates, checklists, and instructions on Client Action Plan
  • Address Client Action Plan components and recommend actions in the written agreement

Intermediaries should ensure subgrantees and affiliates are developing high quality Client Action Plans by:

  • Checking that written agreements in grant documents are being followed
  • Conducting periodic file reviews for quality
  • Making sure oversight is taking place
  • Ensuring plans are being updated over time
  • Sharing with HUD during a performance review
 

Monitoring

Managers can develop procedures and controls so that Client Action Plans are supported by proper documentation and are consistent with HUD regulations, by reviewing HUD’s Office of Inspector General (OIG) audits.

Intermediary Roles and Responsibilities

Intermediaries should ensure subgrantees and affiliates are developing high quality Client Action Plans by:

  • Checking that written agreements in grant documents are being followed
  • Conducting periodic file reviews for quality
  • Making sure supervisory monitoring is taking place
  • Ensuring plans are being updated over time
  • Sharing with HUD during a performance review
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Helpful Resource

Many reports are available on www.hudoig.gov. The reports contain information that other HCAs may find useful concerning housing counseling activities that may not meet audit standards.

Local Housing Counseling Agency Roles and Responsibilities

Agencies may want to standardize Client Action Plan templates. Supervisory monitoring should ensure that Client Action Plans contain:

  • Client file components
  • Identification of housing goals
  • Actions described as specific, with dates, and relates to short-and long-term goals
  • Updates over time