Low and moderate-income home financing : what are the trends in Kansas City?

Over the last decade, many significant developments have influenced home lending. Among these developments are the longest expansion period in U.S. history, pathbreaking technological and financial innovations, new regulatory and legislative incentives for low- and moderate-income lending, and continued growth of community organizations and special home lending programs. ; This article takes a look at these trends and their possible effect on home purchase lending in the Kansas City metropolitan area between 1992 and 2001. The article examines changes in home financing across the entire metropolitan area, as well as among low- and moderate-income borrowers and within low- and moderate-income neighborhoods. Also analyzed are the contributions of different types of lendersbanks and thrifts with local banking offices, banks and thrifts with no Kansas City banking offices, and independent mortgage companies. ; Among the more noteworthy findings in this analysis is the substantial growth that has occurred in home purchase lending for the entire Kansas City metropolitan area, with an increasing share of this lending going to low- and moderate-income borrowers and neighborhoods. Of further interest is the growing importance of home lending by banking organizations without deposit-taking offices in Kansas City. In particular, the rapid emergence of such organizations in low- and moderate-income lending provides a strong signal that this lending is meeting many of the same market tests as other forms of lending, thus foreshadowing a more continuous flow of financing to lower income neighborhoods.