News

Weathering the Storm: Have IDAs Helped Low-Income Homebuyers Avoid Foreclosure?, a study by CFED and the Urban Institute, reports on the relationship between AFI IDA participation, loan terms, and homeownership success, as measured by foreclosure rates.

The researchers tracked 831 homebuyers in 17 states who had purchased homes using IDAs between 1999 and 2007.  They researchers  compared the participants’ mortgage interest rates and foreclosure rates to other low-income homebuyers who purchased homes in the same communities over the same time period.

The research findings are  that IDA homebuyers were two to three times less likely to lose their homes to foreclosure. Compared to 20 percent of the broader sample, only 1.5 percent of IDA homebuyers obtained high-interest mortgage rates. These findings are consistent with the  hypothesis that the bundle of services and features of IDA programs (such as matched savings, financial and homebuyer education, and oversight of or guidance regarding loan products) enable families to obtain affordable mortgages and experience successful and sustainable homeownership outcomes. Read more at the AFI Resource Center