There has been a dramatic rise in female employment and in the growth of households headed by women. More and more, women are becoming major contributors to, or sole providers of, family incomes. New Jersey exemplifies these national trends, with one of every six families headed by women in 1990. One-fifth of the state’s 328,435 female-headed families reported incomes below the poverty line in 1989, compared with less than three percent of married-couple and male-headed families. However, as women take on more responsibility for families’ lifestyles, little is known about what role, if any, that gender plays in women’s ability to obtain mortgage credit.

This research is a descriptive study of women’s access to mortgage credit in New Jersey, commissioned by New Jersey Citizen Action (NJCA). NJCA is the largest statewide consumer’s coalition in New Jersey, made up of more than 75 affiliated organizations including community and church groups, labor unions, tenant, teacher and minority organizations. As part of its Community Reinvestment Act (CRA) monitoring and enforcement strategies, NJCA provides a comprehensive Loan Counseling service to assist low- and moderate-income families in obtaining home mortgage and home improvement loans. This program has helped many women make the transition from renting to homeownership: half of the program’s 723 participants in 1994 were women and 40 percent were single parents (mostly women).

The study was conducted to provide information to NJCA about women’s experiences in the mortgage lending market to allow the organization to better serve its clients.

The research goals of this project were as follows:

1. To compute a quantitative analysis of New Jersey’s home purchase mortgage lending patterns by gender.
2. To perform qualitative research on home purchase mortgage lending practices in New Jersey, focusing on women’s experiences in the home purchase mortgage lending process.
3. To utilize both analyses to examine factors which may influence women’s access to home purchase mortgage credit.

The quantitative research utilized the 1994 Home Mortgage Disclosure Act (HMDA) data for New Jersey to analyze home mortgage lending patterns by gender and other variables. The data was processed to examine both the statewide market and a sample of the fifty lending institutions with the highest amount of originations in the state that were covered by the Community Reinvestment Act (CRA). A number of relevant variables available in the HMDA data that were incorporated into the data analysis are detailed later in the report.

Qualitative research was conducted using two focus groups: one with NJCA loan counselors and a second with NJCA’s Loan Counseling program clients. The focus groups examined women’s experiences in the home mortgage lending market from the two perspectives.

The Home Mortgage Disclosure Act, passed in 1975, requires lending institutions to provide detailed records of all applications for home purchase, home improvement and home refinancing loans. This disclosure allows regulatory agencies and fair lending advocates to pinpoint potential problems which may inhibit low and moderate-income people’s access to mortgage credit. HMDA statements can be used to monitor the behavior of various lending institutions, and/or to gauge the performance of the market as a whole.