Low- and Moderate-Income Homeownership
Homeownership Investment Program "MyMoneyPath"
The "Homeownership Investment Program" is a pilot project being developed through an ongoing partnership between the John Glenn School of Public Affairs and the Ohio Housing Finance Agency, in collaboration with an experienced team of OSU and University of Wisconsin Extension Faculty. This pilot project will build on the Ohio Housing Finance Agency's successful First Time Homebuyer Program by adding an interactive online financial planning module and providing phone-based financial counseling services for the first year after home purchase. The project will be pilot-tested with low and moderate-income first-time homebuyers participating in the Ohio Housing Finance Agency's First-Time Homebuyer mortgage program. The overarching goal is to equip Ohioans with the financial planning skills necessary to sustain homeownership, build savings, and obtain long-term financial security. The effectiveness of this outreach program will be evaluated by creating several treatment groups that receive different combinations of financial planning services. The results of this innovative outreach program will provide replicable, evidence-based practices to improve the Ohio Housing Finance Agency's homebuyer program and to be shared as a model for policy and practice at the local, state, and national level.
Homeownership Investment Program "MyMoneyPath"
- Participating Lender & Housing Counselor Orientation (6.22 MB Powerpoint File)
For more information about these topics, please contact Stephanie Moulton.
Foreclosures and Home Values in Ohio
The recent economic crisis, stemming from the underlying mortgage crisis, has had substantial effects on housing values nationwide. Central to the recovery of housing values, and targeted efforts to stabilize neighborhoods, is an understanding of the relative impact of different factors on housing values. Factors including unemployment, business closings, foreclosures, vacant and abandoned properties, often are observed simultaneously; thus, unpacking the relative impacts of individual factors becomes challenging. Nonetheless, such an understanding is critical to informing targeted efforts at neighborhood recovery. The purpose of this analysis is to unpack the relative influence of various factors on housing values in Ohio, thus providing strategic recommendations for recovery efforts moving forward.
View preliminary results of a report on housing values in Ohio:
- The Impact of the Great Recession on the Ohio Residential Housing Market
(3.29 MB Adobe PDF File)
Down Payment Assistance and Mortgage Performance
One of the primary obstacles that often prevents renter households from becoming homeowners is lack of financial resources (upfront capital) to cover the down payment and closing costs associated with home purchase. With this in mind, many affordable mortgage programs include some form of downpayment and/or closing cost assistance to help offset the burden to the prospective homebuyer, who would otherwise quality for mortgage financing. These "downpayment assisistance" programs take various forms, from grants, to forgivable non-amortizing loans, to low interest rate second mortgages. A concern associated with downpayment assistance programs is that homebuyers who require such assistance to purchase a home may not have the financial resources to sustain homeownership when faced with unexpected costs of being a homeowner, or, that because they have less invested up front, such homebuyers may be more likely to walk away from their property if they face financial hardship. In either case, an expected outcome might be increased mortgage delinquency and foreclosure for homebuyers receiving such assistance. This research project evaluates the loan performance of low and moderate income homebuyers receiving different forms of downpayment assistance in OHFA's First Time Homebuyer Program, to identify factors that are more or less likely to lead to poor loan performance for borrowers receiving downpayment assistance.
- Down Payment Assistance Policy Brief (256 KB Adobe PDF File)
- High Default Risk on Down Payment Assistance Program:
Adverse Selection Vs. Program Characteristics? (277 KB Adobe PDF File)
The first time homebuyer tax credit: Targeting and impacts
The First Time Homebuyer (FTHB) Tax Credit stimulated the housing market from 2008-2010, comprising approximately 40% of all home purchase transactions in Ohio during this period. Questions arise about whether or not the FTHB credit was "adequately targeted"; that is, where were most transactions from the credit concentrated? Were more purchase transactions stimulated in areas hardest hit by the mortgage crisis (with higher foreclosure rates and unemployment), or were they simply concentrated in areas that were relatively stable without the credit? This analysis seeks to address these questions, about the targeting and impact of the FTHB tax credit, using data from Ohio (county recorder data at the property level on all sales transactions from 2004-2010, matched with tax data on the FTHB tax credit from the Ohio Department of Taxation.
Originating lender characteristics and mortgage outcomes in affordable loan programs
Previous research finds that borrowers who receive mortgages from banks (depository institutions) are less likely to become delinquent or default on their mortgages than borrowers who receive mortgages from non-bank mortgage companies (including third party originators). Questions arise about the extent to which such differences are due to banks' ability to select less risky borrowers (information effect), or due to bank regulatory structures that make them more cautious lenders (institution effect). Both effects have substantial, albeit very different policy implications critical to informing low income homeownership policies moving forward. Further, are such differences due to lender localness, rather than institutional structure (or both)? That is, are borrowers who receive loans from lenders who are more invested in their local communities more likely to sustain homeownership over time? Is this due targeting or selection of "less risky" borrowers, or something that the local lender does to prepare homebuyers for purchase (or both)? To address these questions, we employ data on Mortgage Revenue Bond programs in Indiana, Ohio and Florida, with the most detailed analysis of the Ohio MRB program.
A study on informational advantages that local banks supply high risk borrowers:
- Beyond the Transaction: Depository Institutions and Reduced Mortgage Default for Low Income Homebuyers (252 KB Adobe PDF File)
Homeownership by Minorities
While the last decade has witnessed a boom and bust in homeownership generally, there have been, and continue to be, substantial gaps in the homeownership rates between minority and non-minority households. In 2007, the homeownership rate for white households was 75 percent, compared with less than 50 percent for black and Hispanic households- representing more than a 25 percent gap (U.S. Census Bureau). The purpose of this research project is to provide critical insights that will help affordable mortgage programs, like OHFA's First Time Homebuyer Program, extend affordable and sustainable homeownership opportunities to previously underserved residents. This research project also considers the importance of neighborhoods -- both renter and homebuyer neighborhoods -- for accessing information about housing options, enabling housing stability, and providing opportunity for growth and well-being. Preliminary results are available for download now, with more in-depth analysis anticipated for distribution in Fall 2010. Click here for a summary of preliminary findings.
Choose from the links below to access the referenced maps:
- Census Tract Demographics (1.81 MB Adobe PDF File)
- Total Low Income Minority Home Purchases (2.87 MB Adobe PDF File)
- Home Purchase Locations (3.31 MB Adobe PDF File)
Ohio Housing Finance Agency Foreclosure Mitigation Counseling: April 2008-June 2010
The National Foreclosure Mitigation Counseling (NFMC) program provides funding for housing counseling services for homeowners facing mortgage foreclosure. The Ohio Housing Finance Agency (OHFA) is the state's largest recipient of NFMC funding, with over $8 million awarded since April 2008. OHFA uses NFMC funds to contract with local housing counseling agencies that are located strategically throughout the state. Since April 2008, OHFA grantees have utilized NFMC funding to provide counseling services to over 19,000 Ohioans facing mortgage distress. A large number of clients receiving assistance from OHFA grantees were located in places where the foreclosure crisis was most severe, such as Cuyahoga and Summit Counties. However, the program assisted homeowners throughout the state, with OHFA clients representing 87 of 88 counties in the Ohio. Due to the often tedious nature of foreclosure mitigation, it is difficult to measure the outcomes of the counseling efforts at this time. However, a number of clients of OHFA grantees have seen positive results following NFMC counseling interventions, and less than two percent of clients stated that their homes had been foreclosed at the time of reporting.
Preliminary Findings for OHFA's Foreclosure Prevention Project:
- National Foreclosure Mitigation Counseling: April 2008 to June 2010
(1.40 MB Adobe PDF File)
For more information about this topic, please contact Holly Beard.