Paying More for the American Dream VI: Racial Disparities in FHA/VA Lending

This report examines systemic inequities in the mortgage market, as reflected in neighborhood lending patterns based on race and ethnicity. The authors analyzed 2010 Home Mortgage Disclosure Act (HMDA) data, and compared conventional and government-backed prime mortgage lending in seven U.S. cities, based on borrowers' race and ethnicity and the racial and ethnic composition of neighborhoods. The report shows that black and Latino borrowers and borrowers in communities of color received government-backed loans -- insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) -- significantly more often than did white borrowers. The findings indicate persistent mortgage redlining and raise serious concerns about illegal and discriminatory loan steering.