The Community Reinvestment Act was passed in 1977. The CRA requires banks to lend in low- to moderate-income neighborhoods.
The CRA was passed to provide financial services to underserved populations. According to the National Community Reinvestment Corp., since 1977 the CRA has resulted in $4.5 trillion in mortgages and other investments for minority and poor neighborhoods.
To qualify for a CRA home loan, you must be considered a low- to moderate-income family. The Federal Reserve Bank of Dallas defines low to moderate income as being less than 80 percent of the area's median income.
Many banks have developed their own community loan programs to comply with the CRA; HSBC Bank USA, for example, helps low-income borrowers buy, refinance or fix up a home. You do not have to be first-time homeowner to qualify.
Banks must participate in CRA, so if you are looking for a home loan, ask your loan officer if you qualify. By law, the loan officer must take your application for a loan and give you certain disclosures pertaining to your rights as a borrower.
All lenders must publicly display CRA information and provide institutional participation information to the public. Lenders are regulated for CRA compliance by federal government agencies such as the Office of the Comptroller and the Federal Reserve.