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THDA Homebuyer Education

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Special Guest

ralph1Ralph Perrey

THDA Executive Director

joins The Housing Hour to discuss a new study showing the odds of foreclosure were 42 percent lower among participants in THDA’s down payment assistance program who completed a homebuyer education (HBE) class compared to participants who did not.

thhralphTHDA Homebuyer Education

Foreclosure Odds Drop 42% with THDA Homebuyer Ed

THDA began offering down payment assistance as part of its home loan program in January 2002 but did not start enforcing a requirement to attend an HBE class until July of that year. As a result, study author Scott Brown, a Ph.D. student in the Community Research and Action program at Vanderbilt University’s Peabody College, recognized a unique opportunity to compare two sets of otherwise identical homebuyers: down payment assistance recipients from the first half of the year who did not take an HBE class and those from the second half of the year who were required to take HBE.hbei-crop

“This is one of the first studies on the effectiveness of homebuyer education to provide evidence similar to an experiment with a control group,” said Brown.

“Because all of the homeowners in this study qualified for and received a home loan with down payment assistance from THDA in the same calendar year, their demographic, geographic, and financial characteristics are nearly identical. This is very helpful from a scientific perspective because it largely controls for factors other than homebuyer education when comparing one group to the other,” he explained.

Brown’s results were recently published in the prestigious Journal of Policy Analysis and Management. According to the study:

By the end of the seven-year study time period, only 10.6 percent of borrowers with HBE had foreclosed compared to 17.6 percent of those without HBE.

After adjusting for borrower, mortgage, and local economic differences, this amounted to 42 percent lower odds of foreclosure. (Please note, the odds of a foreclosure is not the same thing as the foreclosure rate.) Even after adjusting for differences in borrowers, mortgage loans, and local economies, borrowers who took HBE were still significantly less likely to have their mortgage end in foreclosure seven years later.

“There is a dramatic reduction in the likelihood of foreclosure. These classes make a real difference in people’s lives,” said Ralph M. Perrey, executive director of THDA. “It’s important that THDA does more than just provide families with the financing they need to get in the front door. We’re also preparing them to be successful homeowners for years to come.”

“Foreclosures are expensive and disruptive on all sides, including the borrower, the loan holder, and the mortgage guarantor, and this study shows that HBE classes are a relatively low-cost approach to preventing them in a significant percentage of cases,” said Brown.

The percentage of homeowners falling into default (being at least 90 days behind on payments at some point during the study) was not significantly different between the two groups: 32.6 percent for homeowners without HBE compared to 30.7 percent for those with HBE.

“Both program income limits and need for down payment assistance may have generated a pool of homeowners who are more vulnerable to disruption in their incomes. So these classes may have been more limited in being able to prevent program participants from ever falling a couple months behind on payments,” said Brown. “But HBE may still provide these homeowners with an understanding of how to adapt and be proactive when trouble hits, enabling them to prevent a default from escalating into a foreclosure.”

Another factor in the default data may be that homebuyers tend to participate in HBE classes near their loan closing date, long after a house is selected and an offer made. By this point, the opportunity to influence the price range of homes under consideration and down payment amount, and thus the size of the monthly home loan payment, has already passed.

“More research is needed into the timing of HBE classes and when in the buying process they have the strongest influence,” said Brown. “However, there are other approaches that can reduce the likelihood of default, even after the loan is closed. For example, a study by Stephanie Moulton and colleagues suggests that low-cost follow-ups with new homeowners, such as a quarterly call from a financial coach, could also help lower default rates by catching trouble early.”

Brown’s report cites research indicating, “Half of low-income first-time homebuyers face significant unplanned home repairs or major increases in utility costs, property taxes, or homeowner’s insurance within the first two years of ownership.” When facing these or other hardships, homeowners who completed HBE appear to be significantly better prepared to recover and become current on their payments once again. Among borrowers defaulting for the first time, Brown found the odds of foreclosure was reduced 55 percent among those who took HBE compared to those who did not.

“The numbers in this study represent more than just dollars. These are Tennessee families of moderate-to-low income who are trying to make smart decisions about where to raise their kids and how to build up a safe nest egg for their future,” said Perrey.

Additional highlights from the study:

  • Among borrowers who defaulted, HBE was associated with both an increased probability of becoming current on payments again and of avoiding a later foreclosure. Policymakers should consider the timing and intensity of HBE programs needed to influence default risk and how HBE may promote sustainable homeownership by influencing borrowers’ help-seeking behavior and strategies for resolving defaults.
  • HBE appears to affect both the overall rates and timing of foreclosures. Though borrowers with and without HBE were defaulting at similar rates for the first four years after they received their mortgage, remarkably few foreclosures occurred in the HBE group during this time.
  • Borrower credit scores were strongly connected to whether they were ever 90 days or more late on their payments. HBE did not appear to be particularly helpful in avoiding default or foreclosure for those with the lowest credit scores compared to those with higher credit scores.
  • Only 16.7 percent of borrowers with HBE had their first default end in foreclosure compared to 37.8 percent of borrowers without HBE.

The full study as published in The Journal of Policy Analysis and Management is available online: http://onlinelibrary.wiley.com/doi/10.1002/pam.218…

Scott Brown is currently a Ph.D. student in the Community Research and Action program at Vanderbilt University. He served as an intern in the Research & Planning division of THDA in 2009.

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Tennessee Housing Development Agency

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Special Guests

 

 

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Ralph Perrey, Executive Director and Lindsay Hall, Chief Administrative Director

Ralph Perrey, Executive Director and Lindsay Hall, Chief Administrative Director of Single Family, with Tennessee Housing Development Agency joins The Housing Hour this week to discuss the incredible benefits of first-time home-buying plus other services THDA offers.

 

Also in studio from THDA:

debbie1THDA-crew4

Our Mission:

Leading Tennessee Home by creating safe, sound, affordable housing opportunities.

What We Do:

The Tennessee Housing Development Agency (THDA) is Tennessee’s housing finance agency, created by the General Assembly in 1973. THDA was created to promote the production of more affordable new housing units for very low, low and moderate income individuals and families in the state, to promote the preservation and rehabilitation of existing housing units for such persons, and to bring greater stability to the residential construction industry and related industries so as to assure a steady flow of production of new housing units.

In addition to serving as the primary administrator for numerous federal and state housing programs, THDA is authorized to issue tax-exempt Mortgage Revenue Bonds to support financing opportunities for first-time homebuyers and veterans. THDA is not a direct lender. THDA purchases qualified home loans originated through its private-sector lending partners. All THDA loans have 30-year, fixed-rate terms and offer a maximum grant of 4% in down-payment assistance. All homebuyers receiving down-payment assistance must complete a homebuyer education course.

Our Goals:

Identified as one of the basic human needs, housing has profound impacts, both social and economic, on individuals and communities. Research has shown safe, sound, affordable housing is essential to a healthy household, educational achievement, successful employment, and the stability and safety of the neighborhood. Both housing rehabilitation and the construction of new homes generate jobs and income in the community and produce additional tax revenue.

Our Oversight:

As an instrumentality of the state, THDA is accountable to both the executive and legislative branches of state government, both of which are represented on its 16-member Board of Directors. The Commissioner of Finance & Administration, State Comptroller, Secretary of State, and the State Treasurer all serve as ex-officio board members. The Governor designates one of his staff members to serve on the board and appoints eight other positions including the Board Chair and a Housing Choice Voucher consumer. The House and Senate Speakers also appoint one member each.

In addition to THDA’s own Internal Audit division, a number of federal agencies, including HUD and the US Treasury, conduct annual evaluations to monitor program compliance. The State Comptroller’s office serves as THDA’s external auditor. For the past 11 years, THDA has earned a clean opinion letter from the State Comptroller’s office regarding its audit of THDA’s Financial Statements. In addition, THDA has achieved eight consecutive years with no findings in its Financial and Compliance Audit report.

First Time Homebuyers-THDA

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THDA HeaderMortgage Investors Group, the # 1 THDA Lender, 12 Years in a row!

Special Guests,

Lindsay Hall

LindsaySenior Director of Single Family Programs

and

Derrell, Ella , Marvene and Toumie

THDA crew

 all share their expertise in explaining the benefits of Fist Time home buying programs offered by THDA.

The Tennessee Housing Development Agency (THDA) is Tennessee’s housing finance agency, created by the General Assembly in 1973. THDA was created to promote the production of more affordable new housing units for very low, low and moderate income individuals and families in the state, to promote the preservation and rehabilitation of existing housing units for such persons, and to bring greater stability to the residential construction industry and related industries so as to assure a steady flow of production of new housing units.

First Time Homebuyers-THDA

Lindsay Hall  joined the THDA staff in January 2010, and has served as the Senior Director of Single Family Programs since January 2012.  Lindsay has been working in the real estate and lending industry since 1986. She has held licenses as a real estate salesperson, residential real estate appraiser and mortgage loan originator.

Marvene Carey came on board with THDA in 1993 bringing with her several years of mortgage lending experience. She uses her talents in underwriting and with the  Account management team. Marvene official title is Single Family Loan Production Advisor.

Darrell Robertson brings over 20 years of sales and management experience in corporate America with a Fortune 500 company as well as the real estate and mortgage industries. His proven track record in business and leadership, along with an analytical solution focused service will be an asset to our lending partners. Darrell may be reached at 615-815-2077 or drobertson@thda.org.

Ella Harris has over 34 years of retail and wholesale mortgage lending experience in processing, underwriting, loan origination, operations management and secondary marketing. She has a passion to promote affordable housing options, having spent 12 years as a loan originator focusing on first time homebuyers. Ella may be reached at 615-815-2095 or eharris@thda.org.

Toumie Stacy brings a highly energetic, professional and creative style to our team structure. Her career in the housing and finance industry includes over 12 years in portfolio management, underwriting, and customer service. Toumie joined THDA in 2014 as a Mortgage Specialist with the KMTH program. She may be reached at 615-815-2122 or tstacy@thda.org.

 

Great Choice Tn

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Special Guests

Lindsay Hall, Senior Director of Single Family Programs

And

Marvene Carey, Assistant Director of Single Family Programs

First-time Homebuyers: Great Choice Mortgage Loan Program Information

THDA is a Great Choice for First-time Homebuyers

Great Choice Tn

For first-time homebuyers, one of the greatest obstacles in the homeownership process is saving the money to cover the downpayment and closing costs. The Great Choice Loan Program provides qualified Tennesseans up to 4% downpayment assistance to be used with FHA, VA, USDA-Rural Development and uninsured conventional loans.

  • Click here to learn more about downpayment and closing costs associated with buying a home.
  • Click here to learn more about FHA, VA, USDA-Rural Development and uninsured conventional loan types and how they work in conjunction with the Great Choice Loan Program.

How does Great Choice work?

THDA offers 30-year, fixed rate mortgages and an option for downpayment assistance to qualified first-time homebuyers in Tennessee. In addition to meeting the minimum requirements to qualify for the Great Choice Loan Program, applicants must take a homebuyer education course before closing on the loan.

  • Click here to learn more about 30-year, fixed rate mortgages.
  • Click here to learn more about THDA’s Great Choice 30-year fixed rate mortgage.
  • Click here to learn more about downpayment assistance through THDA’s Great Choice Plus loan.
  • Click here to learn more about homebuyer education.
  • Click here to find a THDA-approved class in your area.

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How do I qualify for a Great Choice loan?

Contact:

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Air Date 6/15/13: Tennessee Housing Development Agency

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Tenth Year in a Row!

Mortgage Investors Group Grabs THDA Top Lender Spot

Special Guest – Ralph Perrey, Executive Director, Tennessee Housing Development Agency
Debbie Reeves, Business Development Director, Tennessee Housing Development Agency
Lindsay Hall, Sr. Director of Single Family Programs, Tennessee Housing Development Agency

Tennessee Housing Development Agency

Their Mission:

Leading Tennessee Home by creating safe, sound, affordable housing opportunities.

Who They Are:

The Tennessee Housing Development Agency (THDA) is Tennessee’s housing finance agency, created by the General Assembly in 1973 (TCA 13-23). As an instrumentality of the state, THDA is accountable to both the executive and legislative branches of state government, both of which are represented on its 20-member Board of Directors. The Commissioner of Finance & Administration, State Comptroller, Secretary of State, and the State Treasurer all serve as ex-officio board members. The Governor designates one of his staff members to serve on the board and appoints 12 other positions including the Board Chair. The House and Senate Speakers also appoint one board member each.

What They Do:

THDA was created to promote the production of more affordable new housing units for very low, low and moderate income individuals and families in the state, to promote the preservation and rehabilitation of existing housing units for such persons, and to bring greater stability to the residential construction industry and related industries so as to assure a steady flow of production of new housing units.

In addition to serving as the primary administrator for numerous federal and state housing programs, THDA has been granted the authority to issue tax-exempt Mortgage Revenue Bonds to support financing opportunities for first-time homebuyers and veterans. THDA is not a direct mortgage lender. THDA purchases qualified mortgages originated through its private-sector lending partners. All THDA mortgages have 30-year, fixed-rate terms and offer a maximum grant of 4% in down-payment assistance. All homebuyers receiving down-payment assistance must complete an eight-hour, pre-purchase counseling course.

Their Goals:

Identified as one of the basic human needs, housing has profound impacts, both social and economic, on individuals and communities. Research has shown safe, sound, affordable housing is essential to a healthy household, educational achievement, successful employment, and the stability and safety of the neighborhood. Both housing rehabilitation and the construction of new homes generate jobs and income in the community and produce additional tax revenue.

THDA is:

Making A Positive Impact on Tennesseans…and Tennessee’s Economy!

  • Provided mortgage financing to over 100,000 first-time homebuyers in Tennessee
  • Helped create/preserve 47,000 affordable, rental units
  • Provides monthly rental assistance to over 35,000 Tennessee households
  • THDA’s total economic impact in 2011 was $728.6 million Self-Sustaining
  • For more information about our economic impact see our Economic Impact Reports from the past five years
  • THDA receives no state appropriations to fund operations, but we do receive administrative fees to service some federal programs.
  • Generates annual earnings through its Single Family Mortgage program ($18 million in FY2012)
  • THDA’s earnings are used to cover operational expenses and fund several critical THDA housing initiatives: High-Performing
  • $57 million – Down-payment assistance grants
  • $42 million – BUILD Loan program, offering 0% construction loans to non-profit housing organizations such as Habitat for Humanity
  • $43 million – Housing Trust Fund, targeting the housing needs of Tennessee’s special-needs populations
  • $2.4 million – Homebuyer Education
  • THDA bonds rated AA+ by Standard & Poor’s and Aa1 by Moody’s
  • Holds over 26,000 mortgages in its portfolio, assets valued at $2.1 billion
  • $557 million in total Net Assets
  • Recognized for program and operational excellence by the National Council of State Housing Agencies

Financial and Regulatory Oversight:
In addition to THDA’s own Internal Audit division, a number of federal agencies, including HUD and the US Treasury, conduct annual evaluations to monitor program compliance. A team of auditors from the Department of Finance & Administration are housed full-time at THDA’s central office.

The State Comptroller’s office serves as THDA’s external auditor. For the past 10 years, THDA has earned a clean opinion letter from the State Comptroller’s office regarding its audit of THDA’s Financial Statements. In addition, THDA has achieved seven consecutive years with no findings in its Financial and Compliance Audit report.

The Housing Hour – Aired 4/21/2012

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This weeks show:

Special Guest – Lindsay HallSr. Director of Single Family Programs
& Laurie GilliamCedar Bluff Schools

Websites mentioned:

Lindsay Hall, Director of Single Family Programs with THDA, talks about Mortgage Investors Group, Veterans, The Hardest Hit Fund and most importantly she breaks down for our listeners all of the programs that THDA offers. THDA is a first-time homebuyer program that has been around since 1973, and was created by the Tennessee General Assembly. Its primary goal is to facilitate the purchase of residential property for those who qualify. They don’t just stop there! They also have partnered with many organizations, cities and counties to help educate our communities about the importance of owning a home. Their homebuyer education program is top notch. THDA does a tremendous job educating homeowners on the ABC’s of managing their finances. They also have created a website to help those needing assistance in this tough economy as the country begins to recover. Please visit www.keepmytnhome.org for more information. Mortgage Investors group is proud to say they are the number one THDA Lender! Mortgage Investors Group has finished at the top for nine years in a row! The Housing Hour would like to thank Lindsay for coming on our show!

The last segment of the show, we talked to Laurie Gilliam of Cedar Bluff Schools, about their annual fundraiser, Springfest. Springfest, formerly Mayfest, is an annual fundraiser held at the campus of Cedar Bluff School on April 28, 2012. Please join the Cedar Bluff Schools for a fun filled day with your family.