Weathering the Storm: Have IDA's Helped Low-Income Homebuyers Avoid Foreclosure?

Posted: 25 Jan 2013 Last revised: 5 Feb 2013

See all articles by Signe-Mary McKernan

Signe-Mary McKernan

The Urban Institute - Center on Labor, Human Services and Population

Ida Rademacher

Corporation for Enterprise Development (CFED)

Caroline E. Ratcliffe

The Urban Institute - Labor and Social Policy Center

Kasey Wiedrich

Corporation for Enterprise Development (CFED)

Megan Gallagher

The Urban Institute

Date Written: April 1, 2010

Abstract

This study provides the first evidence available on loan terms and foreclosure outcomes among individuals who purchased their home through individual development account (IDA) programs. Our results suggest that IDA homebuyers are more likely to receive government-insured loans and less likely to receive high interest rate or subprime loans than other low-income homebuyers. Further, we find that foreclosure rates for IDA homebuyers were one-half to one-third the rate for other low-income homebuyers in the same communities. Overall, the findings suggest that participation in an IDA program with its related services can improve homeownership outcomes for low-income households.

Keywords: Economy/Taxes, Housing, Poverty and Safety Net

Suggested Citation

McKernan, Signe-Mary and Rademacher, Ida and Ratcliffe, Caroline E. and Wiedrich, Kasey and Gallagher, Megan, Weathering the Storm: Have IDA's Helped Low-Income Homebuyers Avoid Foreclosure? (April 1, 2010). Housing Policy Debate, Vol. 21, No. 4, 2011. Available at SSRN: https://ssrn.com/abstract=2205881

Signe-Mary McKernan (Contact Author)

The Urban Institute - Center on Labor, Human Services and Population ( email )

United States

Ida Rademacher

Corporation for Enterprise Development (CFED) ( email )

1200 G Street NW
Suite 400
Washington, DC 20005
United States

Caroline E. Ratcliffe

The Urban Institute - Labor and Social Policy Center ( email )

2100 M Street, NW
Washington, DC 20037
United States
202-261-5548 (Phone)
202-463-8522 (Fax)

Kasey Wiedrich

Corporation for Enterprise Development (CFED) ( email )

1200 G Street NW
Suite 400
Washington, DC 20005
United States

Megan Gallagher

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

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