The Community Reinvestment Act (CRA) is legislation intended to encourage banks and other depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. The CRA requires that each insured depository institution’s record in helping meet the credit needs of its entire community be evaluated periodically. That record is taken into account in considering an institution’s application for deposit facilities, including mergers and acquisitions.

With respect to reverse mortgages, an important factor in a lender’s decision to offer HECMs is a desire to offer products that serve a social purpose of aiding the lower-income elderly population. For depositories, an additional motivation can be to obtain credit for lending to low- and moderate-income households for Community Reinvestment Act (CRA) requirements.

DPL - Deferred Payment Loan

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