Short-Term Impact Report: The HUD First-Time Homebuyer Education and Counseling Demonstration, Preliminary Findings
Congress and many researchers and practitioners in the field of housing counseling have asked whether pre-purchase homeownership counseling for first-time borrowers leads to better borrower outcomes and reduced lender risk relative to no counseling. HUD designed The First-Time Homebuyer Education and Counseling Demonstration as a large-scale randomized experiment to answer the question about the relative efficacy of homebuyer education and counseling on first-time borrowers. This report presents preliminary findings on the impact of homebuyer education and counseling for prospective first-time homebuyers. Preliminary findings indicate that the impacts are mixed, with some positive impacts including higher rates of home purchase for young adults (29 years and younger), and either negative or “no impact” findings for other measures – including no impact on loan performance measures (for the 12-18 months after home purchase period). All findings relate to short-term impacts only (given the length of the study) and are based on information drawn from extensive administrative data and a follow-up survey of study participants. This report provides data that will hopefully help contextualize and explain longer-term outcomes expected in the final report in 2021.