Affordable housing is a major public issue
Regulators consider affordable housing mortgage lending as an important compliance responsibility. Affordable housing is a major political topic for the mid-term elections and will be a top priority for the 2028 presidential election. Affordable housing also is an important form of community development lending under the Community Reinvestment Act ("CRA").
The problem for some banks
At GeoDataVision we noticed that some of our bank clients were not reporting their affordable housing financing activity because they enjoyed "partial exemptions" for HMDA-reporting purposes and therefore were not required to report their multifamily affordable units.
This is a big mistake because those lenders will not get public recognition for their efforts to address the affordable housing crisis. Yes, those banks can still get credit during a CRA exam for affordable housing if they've captured the data. But why would a bank not want to get recognition in the public HMDA data?
The solution
While some banks enjoy "partial exemption" privileges for reporting under HMDA, they can voluntarily report their multifamily affordable housing units. Voluntarily reporting an exempt field such as multifamily affordable units does not forfeit the partial exemption because banks are allowed to selectively exercise the privilege as long as they report "all data fields that are a part of the data point". The only thing needed is to report the number of affordable units in the “Multifamily Affordable Units” field. Do not enter “Exempt” if the mortgage financed any affordable units!
That’s it, a single entry in a single field and your institution will get credit for supporting affordable housing!!!
Recommended Course of Action
If your institution enjoys partial exemption privileges you should scrutinize any multifamily mortgages you've extended to determine if they contain affordable housing. If they do, you should strongly consider voluntarily reporting the affordable units by entering the count in field 42, “Multifamily Affordable Units”. Make sure your institution gets credit for supporting affordable housing!
