June 30, 2016
Financial literacy is an important part of being a well-informed home buyer. For those just starting out on the journey toward home ownership, there can be a great deal of learning to do; how FICO scores affect your ability to purchase a home, how open lines of credit can and often do factor into a lender’s decision to approve or deny a mortgage, etc.
HUD launched a study to see how home buyer education and certain types of financial counseling might make a difference to house hunters.
According to a recent press release at the HUD official site, “The U.S. Department of Housing and Urban Development (HUD) today published early findings from a rigorous, large-scale, random assignment study on the benefits that housing education and counseling provides to first-time homebuyers.”
“Early results from The First-Time Homebuyer Education and Counseling Demonstration are encouraging and suggest homebuyer education and counseling may lead to favorable results for first-time homebuyers in terms of mortgage literacy and preparedness, homebuyer outcomes, and loan performance. ”
HUD began the study in 2013. Between then and early 2016, nearly six thousand first time home buyers in 28 areas were contacted. “The study involves three large national lenders”, the press release says, “63 HUD-approved housing counseling agencies, and two remote service providers.”
Families participating in the study were, “randomly assigned to one of three treatment groups: remote (online education and telephone-based counseling), in-person (group workshops and individual counseling) and a control group that was not offered any services.”
The study’s findings include 65 percent of early participants being offered “remote homebuyer education and counseling initiated services” compared to “25 percent of those who were offered in-person education and counseling” according to the press release at HUD.gov.
“The early findings of this study underscore the need to continue supporting housing education and counseling programs, and the particular importance of making remote education and telephone counseling easily accessible to prospective homebuyers,” says Katherine ORegan, HUDs Assistant Secretary for Policy Development and Research, who was quoted on the HUD official site.
“Over the next four years”, she adds, “we expect to produce long-sought answers about the impact of homebuyer education and counseling on mortgage literacy and preparedness, homebuyer outcomes and loan performance.”
According to HUD, the study’s early findings “suggest homebuyer education and counseling could be a cornerstone of successfully expanding homeownership opportunity and decreasing mortgage delinquency and foreclosures.”
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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