Holding On to the House: The Role of Social and Financial Interventions in Promoting and Preserving Low-Income Homeownership
Low-income families continue to suffer the ripple effects of the Great Recession. Resources lost have not been regained, and homeownership, once a source of family economic security, seems increasingly tentative; underwater mortgages and foreclosures remain common. As the extent of losses becomes clear, a new question emerges: What can be done to promote quality affordable homeownership and help low income households avoid foreclosure? Social work has an important role to play in helping families obtain and preserve their stake in the American Dream. This panel examines different interventions to promote homeownership, and the impact of the foreclosure crisis on economically vulnerable populations.
The four papers in this symposium represent a range of rigorous methods, including randomized-experimental and quasi-experimental designs as well as longitudinal and cost-benefit analysis. Advanced methods are used to test research hypotheses by analyzing quantitative and qualitative data. These analyses seek findings that will inform the development of policy and programs.
The first paper presents the results of a benefit-cost analysis of an asset building/homeownership-counseling program operated by the Denver Housing Authority. It finds that the program yields substantial net benefits to program graduates (both those who bought homes and those who did not), their children, and to the larger society.
The second paper presents evidence on the experiences of households that faced foreclosure using data from qualitative interviews with families, service providers, and community members. The study finds that social workers can play a pivotal role in helping families navigate social services offered and in mitigating the effects of foreclosure.
The third paper presents results from a follow-up study of the American Dream Demonstration, a randomized controlled trial to test the impact of IDAs on low-income households. Six years after the program ended, treatment group members that owned their home at baseline experienced a significantly higher rate of home appreciation than those in the control group and were less likely to have foregone needed repairs.
The final paper presents research on a sample of low-income homebuyers who qualify for subprime mortgages. Findings show that homeowners receiving near-prime loan terms have lower delinquency rates than those of national low-income homebuyers and that most low-income defaults result from liquidity constraints rather than from negative equity.
Conclusions and Implications
Social workers have a vital role to play in helping low-income families to gain an economic foothold after the Great Recession. This panel addresses important questions about that role in facilitating low-income homeownership and protecting families from foreclosure. In addition, the methods in these studies represent the beginning of a framework for evaluating policy and practice in this area. The goal of each paper is to advance understanding of ways in which homeownership and asset-building programs can be shaped to meet the specific needs of the target populations. Findings suggest that social workers should lead a broad social-policy initiative to foster the economic well-being of poor families. Inclusive, asset-based efforts should be part of that initiative.