Ralph Perrey, THDA Executive Director, joins The Housing Hour to discuss a new study showing the odds of foreclosure were 42 percent lower among participants in THDA’s down payment assistance program who completed a homebuyer education (HBE) class compared to participants who did not.

THDA Homebuyer Education

Foreclosure Odds Drop 42% with THDA Homebuyer Ed

THDA began offering down payment assistance as part of its home loan program in January 2002 but did not start enforcing a requirement to attend an HBE class until July of that year. As a result, study author Scott Brown, a Ph.D. student in the Community Research and Action program at Vanderbilt University’s Peabody College, recognized a unique opportunity to compare two sets of otherwise identical homebuyers: down payment assistance recipients from the first half of the year who did not take an HBE class and those from the second half of the year who were required to take HBE.

“This is one of the first studies on the effectiveness of homebuyer education to provide evidence similar to an experiment with a control group,” said Brown.

“Because all of the homeowners in this study qualified for and received a home loan with down payment assistance from THDA in the same calendar year, their demographic, geographic, and financial characteristics are nearly identical. This is very helpful from a scientific perspective because it largely controls for factors other than homebuyer education when comparing one group to the other,” he explained.