All beneficiaries of HOPE 3 were low-income households, and one-third were very low-income. Annual buyer income ranged from just over $5,000 to just under $40,000, with a median of $19,374. Almost one-third were public housing residents, whom policymakers had targeted as an important customer group for the program. Most participants were first-time homebuyers.
As of August 1995, low-income buyers were in possession of 1,234 HOPE 3 homes, averaging $56,000 in value. However, grantee organizations had acquired only about two-thirds of the 3,651 units originally anticipated in their plans. While some of this shortfall can be attributed to a typical underestimation of program start-up delays, the predominant barrier to implementation of HOPE 3 has been locating suitable units for acquisition. Sources that many of the grantees intended to use, such as the Resolution Trust Corporation and Veteran's Administration, had fewer units than anticipated. The stock of HUD/FHA units also decreased during the initial years of the program. In addition, grantees reported that many available units were simply too expensive to acquire or repair.
Once properties were obtained for the program, however, grantees appeared to have few problems rehabilitating them, and most HOPE 3 buyers reported that they were satisfied with the quality of work done on their new homes. Although HOPE 3 buyers had been in their homes for a maximum of only 2-1/2 years at the time of evaluation, only 6 out of 530 buyers at the 26 sample sites had defaulted on their mortgages or sold their homes. When late mortgage payments occur, grantees generally assist with activities to prevent foreclosure.
Grantees were successful in tapping new funding sources for affordable homeownership activities, the report found. They had few problems in meeting -- and exceeding -- their matching requirements. Fully 30 percent of program matching funds came from sources not previously used by the grantees, although most of these funds still came from public sources.
The results of HOPE 3 have been somewhat more modest in enhancing nonprofit capacity. Capacity increased most among grantees when they stretched to take on new or larger scale activities and when the local public sector actively supported the program.
Though impeded by its slow implementation, HOPE 3 made a significant contribution to the affordable housing stock by returning vacant, often unmarketable units to productive use. Copies of Evaluation of the HOPE 3 Program: Final Report are now available from HUD USER for $5 each.
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