Tuesday, September 7, 2021

Corrected; First Nationwide HMDA 2020 Database of 260,000+ Two to Four Unit Loan Originations Merges Loan Level Data AND Lender Name.


I had transposed PER unit values in "Key Observations" section below. Corrected now to reflect that PER UNIT values were HIGHER in 2 unit property vs 4 unit property. This could mean lower PER UNIT rent for units in 4 unit property vs PER UNIT rents in 2 unit property IF amenities and location are seen as equal. 


State and local legislation to make it easier to site two to four unit housing is a welcome development. 

However, I have seen little information about the details of actual two to four unit loans, where they are being made, to whom, and with what underwriting standards.  

To begin to better understand these loans I downloaded 2020 HMDA nationwide data for all two to four unit loan applications that resulted in a loan origination, and added the lender details for each loan. 

Note that this does NOT include all loan applications, ONLY those that resulted in a loan origination in 2020 and was reported via HMDA. 

Data is available at the national, state, metro, county, and census tract level for more than 260,000 loans. While this is a substantial number or loans, it is less than 2% of the nearly 13.9+ million ONE unit loan originations reported in HMDA for 2020. 

The 140 MB Excel workbook I created is HERE. [You likely will need to download the file instead of viewing it in your browser]. 

The first READ ME worksheet lists the 10 worksheets in the Excel file. Worksheets include a pivot table to make navigation simpler and a summary page showing by state all loan originations and PER UNIT values by property unit size (two, three, or four units). Also included is a worksheet listing of all 113 data elements that include race and ethnicity, income, debt to income ratios and loan to value ratios. Another worksheet shows all the codes for  each data element. 

I also include a pivot table and worksheet with only OREGON data. It includes 2 additional data fields, county names and metro names. A MSA focused screenshot of the default Oregon pivot table is pasted below. 

Key Observation

Per UNIT values decrease as property unit size increases. Nationally, a 2 unit property had an average PER UNIT value of $249K vs $159K PER UNIT value for a 4 unit property, a 36% reduction. [Oregon had a more modest 21% reduction from $222K to $175K ].  

IF this translates to rents the PER UNIT rent in a 4 unit property should be lower than the PER UNIT RENT in a 2 unit property, IF amenities and location are seen as equal.  

Oregon HMDA 2020 Two to Four Unit Loan Originations by MSA
Originally created and posted on the Oregon Housing Blog

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