Take-up of mortgage assistance for distressed homeowners: The role of geographic accessibility

Program participation is a necessary but not sufficient condition for the success of housing policies such as mortgage assistance for distressed homeowners. Low rates of take-up of available assistance among eligible homeowners have hampered the potential success of programs such as the U.S. Treasury’s Hardest Hit Fund initiative. This paper investigates the effect of accessibility and related transaction costs, measured in terms of geographic access to application intake agencies, on the likelihood of application completion for homeowners who begin the assistance application process. Using data from a large-scale mortgage assistance program in Ohio, the work is motivated by the observation that a surprisingly small percentage of eligible homeowners who register for assistance submit a completed application. Consistent with the literature on access and transaction costs, we find that proximity to intake agencies increases the probability of application submission in a small, but significant, way. The results suggest that further emphasis should be given to the interactions at the front lines of mortgage assistance programs.