HUD: Participating Jurisdictions Survey Data

Text source: https://www.huduser.gov/portal/publications/hsgfin/addi.html<br> <br>In recognition of the fact that a lack of savings is the most significant barrier to homeownership for most low-income families1,
Congress passed the American Dream Downpayment Act of 2003, which
established the American Dream Downpayment Initiative (ADDI). The ADDI
program was designed to provide assistance with downpayments, closing
costs, and, if necessary, rehabilitation work done in conjunction with a
home purchase. This formula-based program disburses assistance through a
network of Participating Jurisdictions (PJs) in all 50 states and
affords them significant flexibility in designing homebuyer programs to
meet the needs of their communities. Established as part of the HOME
program,2 ADDI is a prime example of direct federal assistance to promote low-income homeownership.
In recent years there have been growing concerns
that many new low-income homeowners have had difficulty maintaining
homeownership.3 To address these concerns in the context of
the ADDI program, the Fiscal Year 2006 U.S. Senate Report on the
Transportation, Treasury and HUD Appropriations Bill directed the U.S.
Department of Housing and Urban Development (HUD) to report on the
foreclosure and delinquency rate of households who received downpayment
assistance through ADDI.4 This report has been developed in response to this congressional mandate.

Due to the limited program history of ADDI, and since
HOME-assisted homebuyers are quite similar to those assisted by the
ADDI, this study jointly estimates annual foreclosure and delinquency
rates for both HOME- and ADDI-assisted borrowers who purchased homes
during the period from 2001 through 2005.5 While all
HOME/ADDI-assisted borrowers were included in the analysis, in order to
have the results be representative of the ADDI program, the sample of
PJs was limited to those that were eligible for an allocation of ADDI
funds in 2004, the year in which the largest number of PJs were
eligible.
The primary objective of the study, which addresses the
congressional inquiry, is to provide an estimate of the foreclosure and
delinquency rates among HOME/ADDI-assisted homebuyers. HUD was also
interested in an analysis of the reasons behind these outcomes. Thus, a
secondary objective of this study is to analyze the factors associated
with variations in delinquency and default rates.

1 See, for example, U. S. Department of Housing and Urban Development, Barriers to Minority Homeownership, July 17, 2002, and Herbert et al., Homeownership Gaps Among Low-Income and Minority Borrowers and Neighborhoods, U.S. Department of Housing and Urban Development, March 2005.

2 Created under Title II of the National Affordable
Housing Act of 1990, the HOME program is designed to provide affordable
housing to low-income households, expand the capacity of nonprofit
housing providers, and strengthen the ability of state and local
governments to develop and implement affordable housing strate-gies
tailored to local needs and priorities.
3 See, for example, Dean Baker, "Who's Dreaming?: Homeownership Among Low-Income Families," Center for Eco-nomic and Policy Research, Washington, DC, January 2005.
4 Throughout our discussion the terms "default" and
"foreclosure" are used to refer to the same outcome where homeowners
lose their home in foreclosure.

5 Foreclosure and delinquency rates for 2000 are not
included here as the data was not consistent enough to produce valid
estimations.
This report is based in part on surveys of participating jurisdictions.<br><br><br>