Research Report Weathering the Storm: Have IDAs Helped Low-Income Homebuyers Avoid Foreclosure?
Ida Rademacher, Kasey Wiedrich, Signe-Mary McKernan, Caroline Ratcliffe, Megan Gallagher
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This study provides the first evidence available on loan terms and foreclosure outcomes among individuals who purchased their home through individual development account (IDA) programs. Our results suggest that IDA homebuyers are more likely to receive government-insured loans and less likely to receive high interest rate or subprime loans than other low-income homebuyers. Further, we find that foreclosure rates for IDA homebuyers were one-half to one-third the rate for other low-income homebuyers in the same communities. Overall, the findings suggest that participation in an IDA program with its related services can improve homeownership outcomes for low-income households.
Research Areas Wealth and financial well-being Social safety net
Tags Low-Income Home Energy Assistance Program (LIHEAP) Asset and debts
Policy Centers Center on Labor, Human Services, and Population