The First-Time Homebuyer Education and Counseling Demonstration: Baseline Report
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. The Baseline Report demonstrates that HUD has successfully implemented the first large-scale national experiment of homebuyer education and counseling. The study has successfully enrolled a diverse sample of over 5,800 first-time homebuyers across 28 large metropolitan areas, and has randomly assigned them to three treatment groups that were offered “remote” (on-line education and telephone-based counseling), “in-person” (group workshops and individual counseling), or a “choice” of remote or in-person homebuyer education and counseling services, and a control group that was not offered any services. The Baseline report describes the study design, implementation, characteristics of the full study sample, and the treatment groups’ experiences with the intervention including an analysis of take-up rates and focus group discussions. Initiation rates were good for remote services and poor for in-person services, with some differences in completion rates for education versus counseling services. Even when people express a preference for in-person services, they initiate those services at lower rate than do people who prefer and subsequently take up remote services. This report explores reasons for these service preferences and behaviors and highlights future analyses that will consider the respective impacts of service delivery mode.