The HUD First Time Homebuyer Education and Counseling (FTHB) Demonstration was designed as a large-scale, rigorous, randomized experiment to evaluate the effectiveness of offering free, voluntary, homebuyer education and counseling services to prospective first-time homebuyers enrolled from 2014 through 2016 through three national lenders. With the experimental design in place, the COVID-19 pandemic provided an unprecedented opportunity to extend the followup of the FTHB demonstration sample (1) to see if the treatment group would fare better during the pandemic (or in its aftermath) than the control group because of its exposure to homebuyer education and counseling offered 6 to 7 years earlier and (2) to describe the overall financial outcomes for the study participants who purchased a home. Key findings for the impact indicate some positive impacts, including treatment group members were more likely to refinance their mortgage between March 2020 and December 2021 and less likely to receive forbearance or other loan modifications than those in the control group, and younger adults (29 years old and younger) had fewer nonmortgage derogatory events, less total nonmortgage past-due debt (even though they had greater nonhousing debt), and lower 60-day mortgage delinquency rates than their control group counterparts. However, the study found unclear, “no impact,” or negative findings for other measures – including no impact on 60-day delinquency rates, no overall impact on average credit scores, and racial differences in the impact of homebuyer education and counseling for White treatment group members and African American treatment group members. The differential racial impact findings suggest the need for more research to understand why these impacts occurred during a national disaster of historic proportions.

Click here for the HUD First-Time Homebuyer Study