HMDA Analysis for Texas 2015
Each September the Federal Financial Institutions Examination Council (FFIEC) publishes the Home Mortgage Disclosure Act (HMDA) data for the previous year. The following is an analysis of that data for MH loan originations in the state of Texas for 2015. Each section inlcudes data tables with categorical totals and year-over-year changes for both MH and site-built homes.
Lending Activity Totals for Texas in 2015
The number of lenders and lending activity increased across the board for both MH and site-built housing in Texas for 2015. Loans originated were up double-digits for both housing types with home improvement loans seeing the most dramatic year-over-year (YOY) increases. Refis were up double-digits, and while MH purchase loans were up 6.51%, they trailed site-built purchase growth by 3.5%. The YOY changes put the MH share of total home purchases right at the 3% mark that they were at in 2014, and it’s interesting to note that a full quarter of responding financial institutions engaged in some form of MH lending.
| Lending Totals | MH | Change (YoY%) | Site-built | Change (YoY%) | MH Share of Market |
|---|---|---|---|---|---|
| Lenders | 356 | 13.02% | 1,387 | 9.3% | 25.52% |
| Loans Originated | 11,555 | 10.75% | 545,711 | 24.77% | 2.07% |
| Purchase Loans | 9,942 | 6.51% | 324,543 | 10.2% | 2.97% |
| Refi Loans | 1,182 | 19.15% | 191,598 | 44.07% | 0.61% |
| Improvement Loans | 431 | 302.8% | 29,570 | 198.54% | 1.44% |
Purchase Loan Breakdown for Texas in 2015
Digging into purchase loans for both housing types, conventional mortgages make up the majority share of both MH and site-built home purchase loans. For MH however, they represent a whopping 86.72% compared to the 63.53% they represent for site-built. Growth for conventional MH purchases was lock step in line with overall MH purchases at 6.51%, while site-built’s growth for conventional purchases was roughly 3% below the overall growth rate for all site-built purchase loans. So the year-over-year growth in MH purchases with financing was almost entirely fueled by natural market conditions, while site-built’s enhanced performance was rooted in a non-conventional loan type, namely FHA-insured mortgages.
FHA purchase loans were up 23.09% over 2014 for site-built homes and represented 24.42% of all site-built home purchase loans. That growth is most likely due to HUDs decision to lower MIP 0.5% in January of 2015 from 1.35% to 0.85%. FHA’s gain in site-built purchase loans looks to have come directly at the USDA’s loan programs expense as FSA/RHS-guaranteed site-built loans were down -29.76%. When looking at MH growth in RHS purchase loans, don’t get too excited by that 33.33% figure, that’s on last year’s total of three for the state that was brought up to a massive four in 2015.
I think an argument can be made that all three of the federally subsidized programs underserve MH consumers given the much smaller share they make up in overall MH purchases compared to site-built purchases, but I find the lack of USDA loan volume the most confounding. The MH share of total FSA/RHS loans was a measly 0.09%. To help put that in perspective, note that MH makes up 4% of all conventional home purchases and that MH purchases represent 13.6% of all home purchase loans for housing outside of metropolitan statistical areas (MSAs). So when it comes to rural housing, it would seem to make sense that the MH share of the rural housing program should be somewhere in between 4% and 13.6%. Taking the 2015 total, that would equate to 175 homes on the low end to 595 homes on the high side. Given the USDA’s loss of market share to FHA, it might not be a bad time to call up the area office that serves your county.
VA loans for both housing types were up double-digits but once again the share that the 2015 total represents for each is dramatically different. VA loans only amount to 2% of MH purchases while they make up 10.7% of site-built purchases.
| Purchase Loans | MH | Change (YoY%) | Share of MH Purchases | MH Share of Market |
|---|---|---|---|---|
| Conventional Purchase Loans | 8,622 | 6.51% | 86.72% | 4.01% |
| FHA Purchase Loans | 1,116 | 5.38% | 11.23% | 1.39% |
| VA Purchase Loans | 200 | 12.99% | 2.01% | 0.57% |
| FSA/RHS Purchase Loans | 4 | 33.33% | 0.04% | 0.09% |
| Purchase Loans | Site-built | Change (YoY%) | Share of Site-built Purchases | Site-built Share of Market |
|---|---|---|---|---|
| Conventional Purchase Loans | 206,190 | 7.12% | 63.53% | 95.99% |
| FHA Purchase Loans | 79,261 | 23.09% | 24.42% | 98.61% |
| VA Purchase Loans | 34,721 | 10.62% | 10.7% | 99.43% |
| FSA/RHS Purchase Loans | 4,371 | -29.76% | 1.35% | 99.91% |
Secondary Market for Texas in 2015
When looking at the secondary market data for MH and site-built conventional purchase loans, the lack of liquidity for MH lenders is stark. Fully 95.22% of conventional MH purchase loans are not sold to a GSE or other financial institution. By comparison, only 29.3% of site-built homes are held in portfolio. The majority of site-built loans sold on the secondary market go to Fannie Mae, which purchased roughly 27%, Freddie Mac purchased 13%, and the rest were sold to various financial institutions. For MH, Fannie purchased a mere 3% of conventional purchase loans, Freddie bought 0.6% and only and additional 1% were sold to other financial institutions.
When excluding the loans sold on the secondary market, MH conventional purchase loans accounted for 12% of the total purchase loans held in portfolio by the originating lender for the state.
| Purchaser | Share of MH | Change (YoY%) | Share of Site-built | Change (YoY%) |
|---|---|---|---|---|
| Fannie Mae Purchased | 3.1% | 19.73% | 26.96% | -0.98% |
| Freddie Mac Purchased | 0.6% | 13.04% | 13.17% | 2.36% |
| Other Financial Institution Purchased | 1.08% | 173.53% | 30.57% | 4.29% |
| Not Sold | 95.22% | 5.36% | 29.3% | 22.36% |
Demographics of Texas Home Purchase Loan Applicants in 2015
Median income and loan amounts grew modestly for MH loan applicants in 2015. The median MH loan amount of $60,000 represented a 1.69% increase over 2014 which was much lower than the 4.49% increase in median value for site-built loans.
Purchase loans to low to moderate income (LMI) borrowers grew healthy amounts for both housing types, with that income segment accounting for almost 50% of MH home purchase loans for the year.
| Income and Loan Values | MH | Change (YoY%) | Site-built | Change (YoY%) |
|---|---|---|---|---|
| Median Income | $49,000 | 2.08% | $90,000 | 1.12% |
| Median Loan Amount | $60,000 | 1.69% | $186,000 | 4.49% |
| Percent of Borrowers - Low to Moderate Income | 49.56% | 10.89% | 18.03% | 15.53% |
| Percent of Borrowers - Low Income | 16.69% | 18.25% | 3.41% | 14.72% |
There isn’t a perfect way to segment out rural vs urban home purchases in HMDA data, the best we can do is to split on whether or not the house is inside or outside an MSA. As we noted earlier when discussing the lack of MH FSA/RHS volume, fully 13.6% of the home loans made outside of MSA’s were for MH homes, and those homes represent almost 30% of total MH purchase loans. That’s almost a third of MH loans coming from areas that account for just 10% of Texas residents.
| Rural/Urban Loans | MH | Change (YoY%) | Share of MH Purchases | MH Share of Market |
|---|---|---|---|---|
| Purchase Loans Inside MSAs | 6,993 | 8% | 70.34% | 2.24% |
| Purchase Loans Outside MSAs | 2,949 | 3.15% | 29.66% | 13.6% |
| Rural/Urban Loans | Site-built | Change (YoY%) | Share of Site-built Purchases | Site-built Share of Market |
|---|---|---|---|---|
| Purchase Loans Inside MSAs | 305,809 | 10.19% | 94.23% | 97.76% |
| Purchase Loans Outside MSAs | 18,734 | 10.51% | 5.77% | 86.4% |
Looking at race and ethnicity, the MH market was closer to matching the states demographics with American Indian or Alaska Natives and Hispanic or Latinos than site-built housing, while both fell below the states percentage of Black or African American residents. Both housing types had higher percentages of White non-Hispanics than that group represents of the state’s population. The amount of Asian site-built borrowers was much higher than that groups share of the state’s population, but was much lower for MH loan borrowers.
| Race/Ethnicity of Purchasers | MH | Change (YoY%) | Site-built | Change (YoY%) |
|---|---|---|---|---|
| Percent of Borrowers - American Indian or Alaska Native | 1.21% | 26.67% | 0.61% | 16.92% |
| Percent of Borrowers - Asian | 0.78% | 84.85% | 8.54% | 11.21% |
| Percent of Borrowers - Black or African American | 5.06% | 17.46% | 6.89% | 19.4% |
| Percent of Borrowers - Hispanic | 41.82% | 4.83% | 21.15% | 15.57% |
| Percent of Borrowers - Native Hawaiian or Other Pacific Islander | 0.09% | -80.56% | 0.35% | 8.76% |
| Percent of Borrowers - White Non-Hispanic | 53.19% | 2.54% | 62.65% | 6.8% |
Explore the Data
If you are a TMHA member and are interested in additional details, we’ve built out the following reports and will update these annually with each HMDA release: