The Home Mortgage Explorer provides lending estimates produced from publicly available Home Mortgage
Disclosure Act (HMDA) data. HMDA requires lending institutions above a certain asset size with a
branch office located in a metropolitan area to submit loan-level information on the mortgage
applications they receive, regardless of whether those applications are eventually
originated.1 The Home Mortgage Explorer provides lending
first-lien mortgages for 1- to 4-family, owner-occupied housing units in the 50 states and
Washington, D.C., for the years 2010 to 2017.2 Both approved
and denied applications are analyzed. Applications not included in the Home Mortgage Explorer
include those withdrawn or closed for incompleteness, preapproval requests, and loans purchased by
the respondent’s institution.
For questions pertaining to the Home Mortgage Explorer, please contact Kyle DeMaria (firstname.lastname@example.org), Lisa Nelson (email@example.com), Layisha Bailey (firstname.lastname@example.org), or Matthew Klesta
Interpreting Home Mortgage Explorer Figures
Originations by Geography. This tab details the distribution of mortgages
originated by income category and allows for the comparison of multiple locations side-by-side.
- For example, in 2017, 24 percent of home purchase loans in Pennsylvania were made to
moderate-income borrowers, whereas only 18 percent of such loans in New Jersey were made to
Originations by Year. For a single geography, this tab graphs annual trends
in mortgage originations by income.
- The number of home purchase loans made to moderate-income borrowers in Ohio increased from
19,243 to 33,901 between 2010 and 2017, an increase of 76 percent.
Denials by Geography. Unlike in the originations tabs, where the percent of
mortgage originations in each income category is calculated, the denial figures do not sum to 100
percent. Instead, denial rates represent the percentage of applications in each income category
denied by lenders. The figures presented under the “By Reason Given” option indicate how
frequently a specific denial reason is reported, expressed as a percentage of the total number of
denied applications where any reason is reported (see Reason Given for more information).
this tab, denial figures for multiple geographies can be compared with one another.
- In 2017, 15 percent of New Jersey home purchase mortgage applications submitted by
moderate-income borrowers were denied compared with 11 percent of comparable applications in
- In 2017, a high debt-to-income ratio was more commonly cited as a reason for denial on
applications submitted by moderate-income borrowers for properties in New Jersey (38 percent of
denied applications) than for properties in Pennsylvania (27 percent of denied applications).
Denials by Year. For a single geography, this tab graphs the annual trends
in denial figures by loan characteristic and income.
- The denial rate for home purchase mortgage applications in Ohio submitted by moderate-income
borrowers peaked at 17 percent in 2011 and dropped to 11 percent in 2017.
Originated Mortgages are mortgages that have been approved and for which
loan capital has been issued.
Denial Rates are calculated by dividing the number of denied mortgage
applications by the total number of originations, approvals that were not originated, and denied
Metro geographies include metropolitan statistical areas (MSAs),
metropolitan divisions (MDs), and nonmetropolitan portions of states. MSAs are economic and
population centers, and some particularly large MSAs are composed of MDs; for example, the
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA includes four MDs. Both MSAs and MDs are composed of
counties or county equivalents. The Home Mortgage Explorer uses 2015 MSA and MD boundaries as
established by the U.S. Office of Management and Budget (OMB).3
Nonmetropolitan portions of states include counties or county-equivalents
that fall outside MSA boundaries.
Loan Purpose refers to how the mortgage capital will be used by the
borrower. Home purchase and home improvement mortgages are intended for the purchase or repair of a
home, respectively. Refinance loans are transactions in which a new mortgage pays off and replaces
an existing mortgage and the borrower receives a new interest rate and/or loan term.
Loan Type specifies whether a federal agency is involved in insuring or
guaranteeing the mortgage. Conventional mortgages are not insured or guaranteed by any federal
agency. FHA mortgages are insured by the Federal Housing Administration (FHA), VA mortgages are
guaranteed by the U.S. Department of Veterans Affairs (VA), FSA mortgages are guaranteed by the U.S.
Department of Agriculture’s (USDA) Farm Service Agency (FSA), and RHS mortgages are guaranteed
by the USDA’s Rural Housing Service (RHS). By lowering down payment requirements or minimum
credit scores, for example, these programs are intended to expand access to credit for borrowers
that may have difficulty qualifying for a conventional loan. The federal agency providing the
insurance or guarantee is responsible for repaying at least a portion of the loan to the private
lender if the borrower cannot.
Reason Given refers to the reasons reported by a lender for denying a
mortgage application. A lender can choose to report up to three reasons, with no single reason
taking precedence. The Home Mortgage Explorer indicates how frequently a reason is reported,
expressed as a percentage of the total number of denied applications where any reason is given
(see Denials by Geography above for an example interpretation). Estimates are provided for
four common reasons given: an elevated debt-to-income ratio, poor or insufficient credit history,
collateral, or insufficient down payment.
Applicant or Neighborhood Income is used to classify mortgage originations
and denials according to the applicant’s income or the median family income (MFI) of the
census tract (“neighborhood”) in which the housing unit is located.
Low/Moderate/Middle/Upper/Unspecified Income are income categories
determined by taking the applicant’s or neighborhood’s income and dividing by the MFI of
the metro area, metro division where available, or state nonmetropolitan area in which the housing
unit is located. In more conceptual terms, the ratio describes how the applicant or neighborhood
income relates to that of the surrounding area. In determining applicant income categories, area
MFIs were taken from the Federal Financial Institutions Examination Council’s (FFIEC) 2010 to
2017 Median Family Income Reports,4 which rely on the 2000
Census and the 2011 to 2015 American Community Survey 5-year estimates and extrapolate incomes for
subsequent years. Neighborhood income categories were obtained from the FFIEC’s 2017 Census
Flat File, which relies on 2011–2015 American Community Survey estimates and is the official
source of neighborhood income categories for CRA purposes.5 If
the location (county or census tract) of the property is missing or the applicant’s income
is missing, the loan is categorized as “Unspecified Income.” Otherwise, originations and
denials are classified into one of four categories based on the Community Reinvestment Act’s
definition of the relationship of the applicant’s or neighborhood’s income to the area
- Low income: < 0.50 of area MFI
- Moderate income: ≥ 0.50 but < 0.80 of area MFI
- Middle income: ≥ 0.80 but < 1.20 of area MFI
- Upper income: ≥ 1.20 of area MFI
See Comparability Across Time below to learn more about how applicant and neighborhood
categories were assigned.
Comparability Across Time. One challenge in studying mortgage lending
by income is that the classification of an applicant or neighborhood into an income category is
dependent on the income of the surrounding reference area, and the boundaries of that reference
metropolitan or nonmetropolitan area can change over time. Counties can be added to or removed from
metropolitan and nonmetropolitan areas due to changes in regional commuting patterns. As a result,
when metro boundaries change, an applicant in one year may be classified differently than a similar
applicant in a subsequent year because of the boundary change’s effect on the area MFI. In
order to accurately observe trends in lending, the Home Mortgage Explorer uses the 2015 MSA
definitions throughout the study period. For metro areas that did not experience a boundary change
during the study period, the area income provided by the FFIEC is used. Where metro boundaries
changed during the study period, an alternative area MFI for the updated 2015 geographic definition
is used. With this approach, trends in mortgage lending are due to actual changes in the market
rather than to boundary changes.
Improved Locational Information. The raw HMDA data identify the census
tract, county, state, and MSA or MD in which the property is located. In a number of cases, HMDA
records were missing an MSA or MD identifier but had a state and county identifier. The Home
Mortgage Explorer fills in these missing MSA or MD fields when state and county data are available.
As a result, the Home Mortgage Explorer uses all available data to locate mortgages and to
accurately produce metro figures.