Homeownership Education Classes
Definition - What does Homeownership Education Classes mean?
Homeownership and education classes include educational training to assist first-time home buyers with their home purchase. Common issues that are addressed in the homeownership and education classes include financial management and problem resolution, evaluating the household’s needs, creating a budget, credit management, avoiding delinquency and foreclosure, selecting a mortgage, real estate basics, finding a home, loan closing, and working with a housing counselor.
Justipedia explains Homeownership Education Classes
The notion of homeownership education has existed for more than 40 years, but the scope of these programs has broadened over the past several years. At their initiation, programs were instituted to help homeowners succeed as home borrowers. However, in the 2000s, as the housing crisis widened, homeownership and education classes became much more extensive. Programs no longer simply helped ill-prepared Americans make complicated financial decisions; the programs were also used to help homeowners as they faced increasing home foreclosures and defaults.
Currently, certain home buyers are required to take homeownership and education classes prior to approval for certain home mortgages. For example, Fannie Mae has introduced HomeReady mortgages. Home buyers who are considering a Fannie Mae HomeReady mortgage must take a homeownership and education class, currently offered through a company called Framework. Fannie Mae’s hope is that home buyers who complete this homeownership educational class will be better able to navigate the home buying process and can avoid some common pitfalls of homeowners.
The issue of whether homeownership and education classes are truly effective, however, remains highly debated. Some experts suggest that formalized education and counseling about the home buying process should help lower the costs for obtaining a mortgage. Furthermore, classes may help homebuyers avoid making emotional buying decisions and reduce the need for outside support from mortgage professionals and real estate agents. Experts also suggest that the public has the most to gain from these programs, especially if the programs can be used to increase stable homeownership.
Those opposed to the mandatory attendance in such programs argue that the benefits may not outweigh the costs.
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