---
license: cc-by-4.0
language: [en]
tags: [finance, mortgage, fha, hmda, lending, denial-rates, standardization, fair-lending, causal-adjustment]
pretty_name: Peer-Adjusted FHA Denial Rates, 2025 (indirect standardization)
size_categories: [n<1K]
---

# Peer-Adjusted FHA Denial Rates — 2025

Every published mortgage denial statistic carries the same caveat: *rates partly reflect who applies where.* This dataset quantifies that caveat at the lender level, apparently for the first time in public.

## Method

Indirect standardization (the technique used for standardized mortality ratios in public health), applied to credit:

1. All **1,217,297** decisioned FHA applications in the complete 2025 CFPB HMDA record are assigned to borrower-profile cells: **state × loan-amount band × income band × DTI band × CLTV band** → **40,459 cells**.
2. The market-wide denial rate is computed for each cell (cells with n<25 fall back to the national rate).
3. For each lender, those market rates are applied to that lender's *own* application mix → **expected denials**.
4. `peer_adjusted_ratio = observed_denials / expected_denials`.

**Reading it:** 1.00 = denies exactly as the market would, facing the same book. 2.13 = denies 2.13× as often as peers facing comparable applications. 0.14 = far less often.

## Headline findings

- Applicant mix **is** real: expected rates range **12.8%–36.9%** across the 100 largest lenders (a 2.9× range)
- The **observed** range is **1.8%–78.7%** (44×)
- Rank correlation between raw and adjusted measures: **0.93** — strict doors stay strict after the borrower profile is held constant
- Sharpest case: **Lakeview Loan Servicing 2.30×** vs **Lakeview Community Capital 0.08×** — same corporate parent, 28-fold difference

Analysis: https://financeratecalc.com/adjusted-denial-rates.html

## Files
- `fha_peer_adjusted_denial_2025.csv` — one row per lender (277 lenders with ≥500 decisioned applications)
- `adjusted_denial_2025.json` — same data plus full method string

## Limitations (please read)

HMDA contains **no credit scores**. The adjustment therefore controls for the profile dimensions the federal record does contain — not for every underwriting-relevant factor. Residual differences may reflect unobserved applicant characteristics as well as lender behavior. Ratios are historical observations, not evidence of wrongdoing, not recommendations, and not predictions about any individual application.

## Citation
> Primary data: CFPB HMDA 2025 Snapshot. Derived measure: Yetiş, Z. (2026), *Peer-Adjusted FHA Denial Rates*, FinanceRateCalc. https://financeratecalc.com/adjusted-denial-rates.html — companion working paper: SSRN abstract 7156938.

CC BY 4.0 · Not a lender · No ads · A denial is a data point, not a verdict on the applicant.