The Consumer Financial Protection Bureau recently released 2021 Home Mortgage Disclosure Act (HMDA) data. The 2021 data showed that purchase application denial rates remained higher for Blacks and Hispanic whites in 2021 than for any other ethnic demographic. The data also showed that each ethnic group saw an overall smaller share of denials compared with each group’s 2020 numbers.
For all applicants, the purchase application denial rate was 8.3 percent, down from 9.3 percent in 2020. For Blacks, 2021 saw a decrease of nearly 3 percentage points to 15.3 percent, from 18.1 in 2020. For Hispanic whites, 2021 saw a near 2 percentage point decrease to 10.6 percent, from 12.5 percent in 2020.
Non-Hispanic whites saw a rejection rate of 6.3 percent in 2021, a drop of .6 percentage points from 6.9 percent in 2020. For Asian borrowers, the rejection rate fell from 9.3 percent in 2020 to 7.9 percent in 2021.
FHA loans, a program designed for homebuyers with no down payment and credit problems, were 12.4 percent for all borrowers.
The FHA refusal rate was 16.1 percent for blacks, 14.2 percent for Asians, 11.9 percent for Hispanic whites, and 9.8 percent for non-Hispanic whites.
The rejection rate for refinancing applications rose from 13.2 percent in 2020 to 14.2 percent last year. However, the rejection rate for blacks seeking to refinance their mortgage was 23.6 percent, and the rejection rate for white Hispanics was 17.6 percent; Asians were 12.3 and non-Hispanic whites were 11.8 percent.