closed loan prior to the recession
(Figure 12). More recently, the average
credit score for a denied loan has
dropped considerably, but the average
score for a closed loan has remained
relatively constant.
programs that will help rehabilitate
their credit and/or work with responsible
private or nonprofit lenders to secure
conventional financing.
These programs may also provide
homeownership counseling and financial
education courses that help prospective
homeowners save resources to put toward
a down payment on a home of their choice.
Overcoming credit issues and providing a
framework to help secure resources for a
down payment can position some
prospective homeowners, who otherwise
would not be able to enter homeownership,
purchase their own home.
This result suggests families with poor
credit have either been able to rehabilitate
their credit and are closing on mortgages or
that they are less likely to attempt to
pursue mortgage financing at all. To the
degree that it is the latter, these families
will continue to place increased demand on
available rental units. In these situations,
prospective homeowners may be able to
obtain financing by participating in
Figure 12. Average Credit Scores for Closed and Denied Loan
760
740
720
700
680
660
640
620
600
580
2006
2007
2008
2009
2010
Closed Loans
2011
2012
2013
2014
2015
Denied Loans
Source: Ellie Mae, Origination Insight Report (2016); HMDA
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