Hogar Dulce Hogar? [Home Sweet Home?]: Prepurchase Counseling and the Experiences of Low-Income Latinx Homeowners in Denver

Anna Maria Santiago
Joffré Leroux
Michigan State University

This study examines the extent to which completion of a prepurchase homeownership education and counseling program was associated with (1) the terms and conditions of original mortgage loans; (2) housing and neighborhood quality; (3) subsequent mortgage refinancing; (4) the sustainability of homeownership; and (5) foreclosures and short sales experienced by low-income Latinx homeowners. The sample consists of 303 Latinx former Denver Housing Authority (DHA) residents who purchased homes from 1995 to 2011; 95 of those residents completed DHA’s HomeOwnership Program (HOP). Propensity score matching techniques were employed to create a comparison group from the remaining 208 homeowners who purchased homes without assistance from HOP. Overall, Latinx homeowners in the study purchased their homes with little or no downpayment; however, Latinx HOP homeowners were more likely to hold 30-year fixed-rate mortgages at lower interest rates than were non-HOP homeowners. Latinx HOP homeowners also resided in homes that were larger and had fewer upkeep issues and were in neighborhoods with few vacant homes or properties in disrepair. In addition, Latinx HOP homeowners owned their homes, on average, for 12 years—about 2 years longer than did non- HOP homeowners, and their average home value in 2018 was nearly $322,000—about $58,500 higher than that of non-HOP homeowners. Nonetheless, one of five Latinx homeowners in the study had experienced a foreclosure by 2018. Moreover, the rate of foreclosures and short sales was 25 percentage points higher for non-HOP Latinx homeowners than for HOP homeowners.