75A - PUBLIC HEARING 5 YR CONSOLITATED PLAN

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Lending Discrimination Lending discrimination is a contributing factor to fair housing issues in Orange County. Given the scarcity of affordable rental housing and high cost of living within Orange County, loan opportunities for home improvement, purchase, and refinancing are important tools for moderate and low-income households. Using Home Mortgage Disclosure Act (HMDA) data, the tables below show the racial discrepancies in the likelihood that a person's loan application, based on their race, will result in an originated loan or a denial. Percentage of Loan Applications Resulting in Originated Loans by Race or Ethnicity and Loan Purpose in Orange County, 2014-2017 Home Mortgage Disclosure Act Data Race or Ethnicity Home Purchase Refinancing Home Improvement White, Not Hispanic 66.56% 59.12% 61.96% Black, Not Hispanic 61.93% 49.62% 49.49% Asian, Not Hispanic 63.95% 55.35% 51.26% Hispanic/Latino 59.54% 50.57% 51.60% Percentage of Loan Applications Denied by Race or Ethnicity and Loan Purpose in Orange County, 2014-2017 Home Mortgage Disclosure Act Data Race or Ethnicity Home Purchase Refinancing Home hnprovement White, Not Hispanic 9.09% 16.30% 17.60% Black, Not Hispanic 12.03% 22.04% 31.74% Asian, Not Hispanic 9.75% 16.65% 23.21% Hispanic/Latino 12.38% 20.75% 28.12% Across all ethnic groups and loan types, White residents are the most likely to have their loan applications result in originated loans. Disparities across racial or ethnic groups are not very significant, however. For Home Purchase, approval rates range between 59.54% and 66.56%. Home Purchase loans also have the highest rate of approval, which is important in ensuring equal access to the homeownership market. Refinancing and Home improvement loans have similar approval rates, with Black borrowers approved at about 49%, while White borrowers are approved at 59% and 62%, respectively. In a county where 57% of housing units are owner occupied and the median price for a sold home is $721,400,24 the lack of a significant disparity in loan origination for home purchase loans is promising. More disparities emerge when looking at the other types of loans. Across refinancing and home improvement loan applications, Hispanics are less likely to have a loan originate, and roughly 10% more likely to have a home improvement loan application denied and 4% more likely to have a refinancing loan denied. All ethnic groups are more likely than White residents to have their loan applications denied. Black residents are roughly 6% more likely to have refinancing loan application denied. More drastic disparities appear for home improvement loans. Black residents 24 https://www.zillow.com/orange-county-ca/home-values/ 320 75A-599