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Publication Date

February 2013


Allison Freeman, Jeffrey J. Harden

A study of low-income home buyers finds no difference in default rate based on whether they received downpayment assistance, but found the source of assistance matters.

Using data from a panel study of low‐ and moderate‐income homeowners, the authors assess the determinants of the use of several types of downpayment assistance and the effect of using assistance on mortgage performance. They find no difference in mortgage performance between those who did and did not use assistance, though they do find differences in reliance on types of assistance. Based on their findings, the authors urge caution about imposing highly restrictive downpayment requirements that would disproportionately restrict access to mortgage credit.




Topics(s): Affordable Homeownership, Community Advantage Program, Default, Bankruptcy, & Foreclosure, Housing Policy, Mortgage Finance, Other