Today, Reinvestment Fund, a nationally-focused Community Development Financial Institution (CDFI) headquartered in Philadelphia and Atlanta, released a new report entitled “Exploring Racial and Ethnic Disparities in Mortgage Access Across Metro Atlanta”, which analyzes 2022-2023 Home Mortgage Disclosure Act (HMDA) data to identify trends and disparities in mortgage access among White, Black, Hispanic and Asian people across counties and sub-county areas in the Atlanta metropolitan area. View the report HERE.
Reinvestment Fund analyzed HMDA data in Fulton, DeKalb, Cobb, Gwinnett and Clayton counties to estimate how much more or less likely Black, Hispanic and Asian borrowers were to have their mortgage applications denied than White borrowers with similar financial characteristics and histories. Their research found that across the Atlanta region, mortgage applicants of color are more likely to be denied conventional loans than White applicants with similar financial qualifications. While lower incomes, higher debt-to-income ratios and loan-to-value ratios above 90 percent were significant drivers of denial rates across the region, denial rates for Black, Hispanic and Asian borrowers remained higher than White denial rates even among well-qualified applicants. Amid rapidly increasing costs for metro Atlanta homebuyers, the report reveals how legacies of racial discrimination are creating additional barriers to homeownership for people of color.
Other notable findings include:
- Black borrowers experience the highest disparities in access to mortgage credit in submarkets with the largest concentrations of Black population, while Asian borrowers experience the highest disparities in submarkets with the smallest Asian populations.
- In every county except Clayton, Black borrowers are more than twice as likely as similar White borrowers to have their mortgage application denied.
- In South DeKalb, Black borrowers are more than four times as likely as similar White borrowers to have their application denied.
- Despite Asian borrowers mirroring their White counterparts in financial qualifications, they are more likely than similar White borrowers to have their mortgage application denied across the metropolitan area.
The report’s findings highlight the need for greater enforcement of non-discrimination protections in the lending process, including the Equal Credit Opportunity Act and Fair Housing Act. The researchers also recommend adjusting calculations of debt-to-income ratios to exclude student loan debt and expanding downpayment assistance programs to lower loan-to-value ratios for borrowers. They also call for greater data transparency around usage of borrowers’ credit scores and history in order to better identify and address potential racial discrimination in violation of federal law.
This report builds on Reinvestment Fund’s 2024 report, “What’s Driving Post-Pandemic Black-White Mortgage Access Gaps? A Spotlight on 10 Southeastern Cities,” which analyzed Black-White gaps in homeownership, mortgage market activity and barriers to accessing mortgage credit, as well as investor-buyer mortgage activity, in Atlanta and nine other Southeastern cities.
“Our findings show that current mortgage lending practices across metro Atlanta are exacerbating racial disparities in homeownership and making it even harder for people of color to purchase a home in an increasingly tight housing market,” said Dr. Sara Patenaude, Director of Policy Solutions for Southeast at Reinvestment Fund and lead author of the report. “Stronger oversight of mortgage lending practices can help address these disparities and uphold the discrimination protections long-enshrined in housing and civil rights law.”
Reinvestment Fund was established in 1985 and opened its Atlanta office in 2017. Since then, Reinvestment Fund has invested more than $677M across the state of Georgia including $570M across the Atlanta Metro Area with the goal of creating a more equitable community for all residents. Reinvestment Fund’s impact has reached nearly 1,000,000 Georgians through investments in 78 organizations working in and leading education, housing, healthcare and health food programs. To date, Reinvestment Fund has created, rehabilitated, acquired, or preserved nearly 4,000 housing units across the state, created more than 4,400 jobs including permanent jobs and construction jobs and supported the creation and/or rehabilitation of more than 4.1M square feet of property.
To learn more about Policy Solutions, please visit: www.reinvestment.com/research/policy-solutions. To learn more about Reinvestment Fund and its work across lending, housing, early childhood education, healthy food and more, please visit: www.reinvestment.com
About Reinvestment Fund
Reinvestment Fund is a mission-driven financial institution committed to making communities work for all people. We bring financial and analytical tools to partnerships that work to ensure that people in communities across the country have the opportunities they strive for: affordable places to live, access to nutritious food and health care, schools where their children can flourish, and strong, local businesses that support jobs. We use data to understand markets and how transactions can have the most powerful impact, which has consistently earned us the top Aeris rating of AAA for financial strength and four stars for impact management. Our asset and risk management systems have also earned us an AA- rating from S&P. Since our inception in 1985, Reinvestment Fund has provided over $3.2 billion in financing to strengthen neighborhoods, scale social enterprises, and build resilient communities. Learn more at reinvestment.com.
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