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

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