Gov. Maura Healey answers reporters' questions after signing the fiscal 2024 budget Aug. 9, 2023, flanked by (from left) Administration and Finance Secretary Matthew Gorzkowicz, Lt. Gov. Kim Driscoll, Senate President Karen Spilka, and House Speaker Ron Mariano. Photo by Sam Doran | State House News Service

Prominent housing advocates say they’re planning to fire up lobbying campaigns to reverse Gov. Maura Healey’s line-item veto that will cut a state grant program for foreclosure prevention counseling and first-time homebuyer grants by 50 percent.

Called “Chapter 206” in the language of state budget bureaucracy, the Division of Banks-administered program gets “not less than” $1.5 million every year under state law from loan originator license fees and, housing advocates say, is often given notably more money by the state legislature than the legal floor mandates. For example, the compromise budget passed by the House and Senate funded the program at $3.05 million.

In her veto last week, Healey cut the legislature’s appropriation down to $1.55 million – a number that would deal a blow to the education programs run by nonprofit community development corporations statewide, said Kevin Murray, interim executive director of the CDC trade group MACDC.

“Our members were really taken aback that this. We want to believe that this was a mistake, an oversight,” he said.

Though small, the grant program is a key part of the state’s foreclosure-prevention safety net and an important source of money for first-time homebuyer classes that are important to helping close the state’s racial home ownership gap, said Rachel Heller, executive director of housing advocacy group CHAPA.

“These organizations are often bringing together multiple funding sources to do this work,” she said. “So any gap in funding is a challenge to support the staffing that’s needed, the training that’s needed and the support that’s provided [to homeowners and first-time buyers].”

In addition to educating first-time and first-generation homebuyers about the financial and logistical ins and outs of homebuying, many affordable loan programs also require borrowers to have taken part in a qualified homebuyer education course.

In an email, a Healey administration spokesperson said the governor’s veto was “consistent” with what she proposed in her original budget, and stated the $1.55 million “will not impact [the Division of Banks’] ability to operate the program.”

The next opportunity CHAPA, MACDC and others might have to reverse the cuts will be when the legislature returns to formal sessions this fall and when it may take up other override requests like one for