Examining discrimination in home improvement financing (Home Mortgage Disclosure Act 2012–2016) and neighborhood health in the United States

Abstract

Institutional racism by financial institutions historically denied Black homeowners access to home mortgage loans. An understudied aspect of the homeownership continuum is home repair and maintenance, with few studies assessing discrimination in access to funding for home improvement. Using US Home Mortgage Disclosure Act data between 2012 and 2016, we assess individual and census-tract level predictors of applying to, and being denied home improvement loans. We find non-Hispanic Black applicants are significantly more likely to be denied loans (OR: 2.28 p < 0.01), and that loans for areas with a high proportion of non-Hispanic Black residents (OR: 1.09, p < 0.01) are most likely to be denied, while applications in tracts with the highest proportion of non-Hispanic white residents (OR: 0.90, p < 0.01) are least likely to be denied. We find that white (r = 0.203), but not Black (r = 0.02) home improvement applications are correlated with the proportion of Black residents currently residing in the census tract. Additionally, at the census tract level, home improvement loan denial rates are associated with usually getting less than 7 hours of sleep, which is associated with adverse health outcomes. Future research on institutional racism should consider the social and health impacts of discrimination in home improvement loan financing for Black applicants and within Black communities.