As with any budget, there is always room to cut.

But should everything be on the chopping block? Our federal budget deficit demands that we make cuts, and many of them will be deep and painful. However, just as with your personal budget, some things shouldn’t be chopped.

As part of federal budget negotiations, $88 million in cuts were made to the Department of Housing and Urban Development’s Housing Counseling Assistance programs for fiscal 2011. The cuts will eliminate funding for nonprofit HUD-approved community-based housing counseling nationwide. Among other services, the counselors provide rental, pre-purchase and reverse-mortgage advice, homeless assistance and foreclosure-prevention help. More than 2,700 counseling agencies participate in the HUD program.

“If there was any doubt that middle- and working-class Americans are paying more than their fair share in the deficit-reduction battles, the budget cuts recently enacted to prevent a government shutdown make it absolutely clear,” said Marc H. Morial, president and chief executive of the National Urban League.

It is unreasonable, in the midst of a housing crisis that has financially devastated hundreds of thousands of households, that we are taking away access to free or low-cost counseling that helps these families.

Yes, let’s cut out funding to legitimate groups so that crooks can swoop in and take even more advantage of homeowners looking for help to prevent foreclosures. The cuts come just as HUD was launching a campaign to help homeowners facing foreclosure avoid scams by directing them to trusted housing counselors.

“With millions of homeowners in foreclosure or at risk of losing their homes as they fall behind on mortgage payments, and 8 million Americans expected to face foreclosure now through 2012, the timing of this campaign could not be more prudent,” HUD said in a release about its “Know It. Avoid It. Report It” campaign.

Seniors especially could be affected by the cuts. Before taking out a Home Equity Conversion Mortgage, which is a reverse mortgage backed by the Federal Housing Administration, seniors must get housing counseling. Reverse mortgages, which allow people 62 or older to borrow against the equity in their homes, were largely created for those who are cash-poor and house-rich. Without supplemental funding, seniors already are facing higher costs to receive the mandatory counseling.

We also are eliminating the aid to housing counseling groups when so many people still lack the basic knowledge to make better home-buying decisions.

A new survey by Zillow Mortgage Marketplace found that half of prospective home buyers don’t understand mortgage basics. For example, 57 percent of buyers surveyed do not know how a 5/1 ARM, a hybrid mortgage that mixes an adjustable rate with a fixed rate, works. Potential buyers were asked whether a 5/1 ARM always resets to a higher interest rate. The majority of respondents answered yes. For the first five years, the rate is fixed. After that, the interest rate changes once each year for the remaining life of the loan. The interest rate on a 5/1 ARM adjusts to whatever the prevailing rate is at the five-year mark. This could mean rate could go up or down.

“Most people wouldn’t jump out of a plane if they didn’t know how to use a parachute, yet each year many buyers commit to the largest loan they will take out in their lifetimes without understanding essential information about mortgages,” said Erin Lantz, Zillow Mortgage Marketplace director.

Some pre-purchase programs were found to reduce the incidence of any form of mortgage default by as much as 34 percent, according to report by the Mortgage Bankers Association’s Research Institute for Housing America.

During fiscal 2010, HUD-approved agencies provided housing counseling services to about 3 million households, using HUD and non-HUD funding, the highest level ever, testified Vicki Bott, a deputy assistant secretary at HUD, before a House subcommittee recently.

Agencies provided foreclosure prevention counseling to more than 1.4 million households. In almost half, people were able to modify their mortgage.

Susan C. Keating, president and chief executive of the National Foundation for Credit Counseling, denounced the funding cuts, urging Congress to do the right thing. Reinstate the funding, she said, “allowing millions of homeowners to receive the help they need.” Considering all the bad mortgages people got themselves into (or were snookered into), one would think our government, which bailed out the banks that made those bad loans, wouldn’t cut one of the most effective avenues to ensure that people make better home-buying decisions.

Readers can write to Michelle Singletary c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071. Her e-mail address is Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.