Why Do Lenders Deny Small-Dollar Mortgages at Higher Rates?

Urban Institute, July 31, 2018–Laurie Goodman, Bing Bai
The authors said it’s not clear why denial rates are higher for small-dollar mortgages. Applicants for these smaller mortgages might have weaker credit profiles than applicants for larger mortgages. But if denial rates for smaller loans are higher simply because applicants for smaller loans have weaker credit profiles, the loan size is not to blame.