Study Researches Home-Buyer Program Effectiveness

May 31, 1996

Greensboro, NC: For more than 600 Greensboro residents, a program operated by the City of Greensboro has been the difference between alternative housing and the security of homeownership. Though it is successful, the program's leaders seek to assess its effectiveness in serving low- and moderate- income first-time home buyers. A study by research scientists from North Carolina A&T State University recently contributed to this assessment.

The Greensboro Affordable Home Loan Initiative Program (GAHL) is operated through the Greensboro Housing Counseling Service (GHCS) by the City of Greensboro. GAHL promotes homeownership for low- and moderate-income families by providing assistance through grants and loans, debt and income management counseling, and home buyer education. Funding for the program is derived from a housing development fund generated from a one-cent setaside of the city tax rate.

"GAHL is a very valuable program to the city and its residents," said Dr. Carolyn Turner, an associate professor with the Housing Research Program at A&T, and the research project's director. "It helps people achieve their goals while promoting the stability of homeownership."

Through GAHL, the Greensboro Housing Counseling Service seeks to create a pool of pre-qualified low- and moderate-income buyers. The GHCS provides financial evaluation and counseling to help determine eligibility for program support services.

The A&T study examined the audience that GAHL serves and the impact the program is having on assisting its targeted audience. To do this, researchers used the Applied Survey Research Laboratory, a centralized research facility integrating the use of progressive survey methodologies with computer and communication technologies, located in the C.H. Moore building on A&T's campus.

"Using the ASRL made the labor-intensive process of an effective telephone and mail survey possible," said Turner.

During a six-month period, 526 program applicants were contacted by a team of six interviewers. Those who completed the program as well as those who did not were interviewed in an effort to gauge the program's effectiveness at serving its targeted audience.

The study found that GAHL is serving primarily female-headed, African American households with incomes between 51 and 80 percent of the Greensboro median family income. The study also revealed that the average price of a home purchased with program assistance is approximately $60,000, and that these homes were located throughout the city.

"Overall, the city homeownership program is serving the targeted population of low- and moderate-income buyers who are entering ownership for the first time," said Turner. "Since the program's inception in 1990, the average income of the individuals and families it serves has shifted downward. However, a noteworthy finding from the study is that homes purchased by the program's participants are located throughout the city. This dispersion is a definite strength of the service to the community."

In addition to studying the program's audience, the project examined how applicants learned of the program and their perceptions of the program.The majority of the applicants learned of the program from either a realtor or from family and friends. Media information accounted for only about 25 percent of this knowledge.

"Part of a successful program is reaching a targeted audience," said Turner. "With this information, the program's organizers can assess their effectiveness at reaching the targeted audience."

Of great importance to any program is the satisfaction of its participants. Nearly three-fourths of those who purchased homes through the program stated that they would not have been able to do so without the program's assistance. Current participants also responded favorably to the study's questions concerning the program's support, information and instruction.

Those who terminated involvement with the program before purchasing a home mentioned a variety of reasons, among them: rigid program requirements, unresolved credit problems, and a lack of appropriate resources.

"While not everyone who applied to the program was accepted into or completed it, GAHL remains valuable to Greensboro and individual applicants," said Turner. "Many times, those applicants who didn't participate in GAHL were directed to similar programs or benefitted by the assessment of resources required in the application process."

Andy Scott, Director of the Greensboro Department of Housing and Community Development, oversees the program and states that "the zero default rate of this effort speaks to its success. The A&T study contains recommendations that we are using to further strengthen the program and to enhance its continued service to the community."

For more information, please contact Dr. Carolyn Turner, NC A&T School of Agriculture, (336) 334-7069.