Community Reinvestment Lending: A Description and Contrast of Loan Products and Their Performance

The 1977 Community Reinvestment Act (CRA) was enacted to encourage banking institutions to meet the credit needs of their entire communities. In response, lenders have expanded their lending activities in low-income, minority, and other traditionally underserved markets. New loan products have become increasingly more affordable and flexible, allowing for little or no downpayment (sometimes without requiring mortgage insurance), high debt burdens, and nontraditional proofs of creditworthiness…