While mortgage lending in rural areas expanded last year as did as did overall lending, rural applicants are more likely to be denied and to pay higher interest rates than urban borrowers. While 21 percent of rural applicants were denied a loan last year–some 500,000– the overall rate for the U. S. was 18 percent. Forty percent of the rejections were for poor credit, according to dailyyonder.com, and six percent of rural mortgage originations were for high-cost loans as opposed to three percent at the national level. This is attributable in part to the prevalence of manufactured homes in rural areas which are financed with personal property, or chattel, loans, which have shorter terms and higher rates. Approximately 37 percent of rural manufactured home loans were classified through the Home Mortgage Disclosure Act (HDMA) as high-cost loans, MHProNews has learned.
