Association for Public Policy Analysis & Management

Homebuyer education and counseling services are designed to help homebuyers think about the benefits and risks of homeownership, understand how to choose a home and appropriate mortgage, and build the financial knowledge and behaviors needed for sustainable homeownership and financial health. The U.S. Department of Housing and Urban Development (HUD) established the First-Time Homebuyer Education and Counseling Demonstration, a large-scale, multi-site experimental study to evaluate the effectiveness of homebuyer education and counseling services for low-, moderate-, and middle-income prospective first-time homebuyers. The study began enrollment in September 2013, and randomly assigned (through February 2016) more than 5,800 prospective first-time homebuyers from 28 large metropolitan areas either into a treatment group that was offered access to free homebuyer education and counseling services (“the intervention”) or into a control group (that was not offered any services).

This presentation will describe the First-Time Homebuyer Education and Counseling Demonstration and highlight findings from two reports: the Participation Report and the Early Insights Report. The Participation Report explores why individuals choose to complete homebuyer education and counseling services (or not) and the personal characteristics that associate with participation in services, and where these findings have implications for how lenders and service providers market and deliver services. Using data on a subset of early enrollees, the Early Insights Report finds that offering individuals access to homebuyer education and counseling services has favorable impacts: the treatment group’s mortgage literacy, credit scores, and communication with lenders were each demonstrably improved, and all signal steps on the path to sustainable homeownership. Future reports will provide more-detailed analyses of the impact of the homebuyer education and counseling intervention, enabling us to answer a wealth of additional research questions.

This presentation should be of keen interest to APPAM members in particular for two reasons: (1) the conference often includes rich offerings on housing policy topics; and (2) the study’s rigorous (three-armed) experimental evaluation design. We expect that conference attendees will be interested to learn more about this study for both its substantive and methodological contributions.