How may the HECM counseling fee be paid?

The HECM counseling fee may be paid in one of two ways:

1) The client and related parties may pay the counseling fees directly to the agency; or
2) The cost of the HECM counseling may be paid out of a HECM borrower’s loan proceeds. Upon agreement of both the lender and the borrower, the closing agent may assume responsibility for remitting payment to the counseling agency that performed the service.

Payment under either of these methods must be reflected in the 800 series on the HUD-1 settlement statement.

Lenders may not pay HUD-approved counseling agencies, directly or indirectly, for HECM counseling services through either a lump-sum payment or on a case-by-case basis.

Form HUD-92902, Certificate of HECM Counseling, provides a space to record how the counseling session will be paid, - either “Upfront Fee for Counseling Session” or “Financed Fee for Counseling Session” – and a box to check if the fee has been waived.

Form HUD-92902 is located at:

Mortgagee Letters 09-10, 08-28 and 08-12 are available at

HECM counselor instruction for issuing a HECM Certificate in FHA Connection is available at

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02648