Last year mortgage lending in rural America improved like the rest of the nation, but rural applicants still face more rejection and pay higher interest rates than their urban counterparts. Rural African American and Native American loan-rejection rates were twice the national figure, Keith Wiley of the Housing Assistance Council writes for the Daily Yonder.
The number of of mortgage loans granted to rural applicants rose 27 percent from 2011 to 2012, but "mortgage activity in rural America is still well below the levels of the mid 2000s," Wiley writes. In 2012, about 500,000 rural requests for home loans were rejected, a rejection rate 21 percent. About 40 percent of the rejections were attributed to bad credit history or high debt-to-income ratio.
"Loan denial and high-cost lending rates were particularly acute for rural minorities," Wiley reports. "Approximately 40 percent of rural African American and 35 percent of Native American applicants were denied mortgages—twice the denial rate for all U.S. applicants."
Rural borrowers are also more likely to pay high interest rates. "High-cost" lending, with an interest rate of 1.5 or more percentage points above the prime rate, is twice as high in rural areas as the national level at 3 percent, Wiley writes. "Rural African American and Native American borrowers were also twice as likely to receive a high-cost home loan as rural white non Hispanics."
To see the Housing Assistance Council's information about mortgages and housing for specific communities, click here.
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| High-cost loans charge interest more than 1.5 percentage points above the prime rate. (Yonder map) |
"Loan denial and high-cost lending rates were particularly acute for rural minorities," Wiley reports. "Approximately 40 percent of rural African American and 35 percent of Native American applicants were denied mortgages—twice the denial rate for all U.S. applicants."
Rural borrowers are also more likely to pay high interest rates. "High-cost" lending, with an interest rate of 1.5 or more percentage points above the prime rate, is twice as high in rural areas as the national level at 3 percent, Wiley writes. "Rural African American and Native American borrowers were also twice as likely to receive a high-cost home loan as rural white non Hispanics."
To see the Housing Assistance Council's information about mortgages and housing for specific communities, click here.
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