Chartered bank considers ‘diversity’ in home loans

The Federal Home Loan Bank (FHLBank) of Atlanta is considering customers’ “diversity” when granting them home loans.

Documents published Tuesday by journalist Christopher Rufo show that FHLBank is doling out $8 million in home loan grants based in part on whether the applicants are female, disabled, or members of a minority. 

Applicants to the program can amass up to 50 points by fulfilling certain criteria, with the loans going to the highest winning scores. If the applicant’s project is in a rural area, for example, they are granted 10 points. If it is housing for older adults, the applicant scores another 12 points, and leveraging earns another eight points.

But the largest block of points goes to those who fulfill diversity, equity, and inclusion (DEI) criteria. Applicants who prove they are owned by a woman, disabled person, or minority receive 15 points. If the applicant is a nonprofit, they must show that they have “adopted a statement that their mission is to provide housing and services to minorities, women, and/or individuals with disabilities.”

“We are committed to embedding DEI principles across all levels of our organization and into all elements of our internal and external operations, strategic planning, and decision making,” the bank said in the documents. “We know that progress cannot be achieved through symbolic gestures or complacency; therefore, we challenge ourselves to be self-reflective, hold each other accountable, and continuously evaluate our practices to ensure the full integration of DEI into our culture. We are collectively stronger through an inclusive culture.”

Congress established the FHLB system in 1932 as a government-sponsored initiative to revive mortgage lending after the Great Depression. Each of the 11 banks in the system cover several states and serve as “banks to banks” meaning they provide lending services to other financial institutions. FHLBs are chartered, though not directly subsidized, by the federal government. They are also accorded certain benefits by the government, such as raising interest rates slightly higher than those set by the Treasury Department.

FHLBank Atlanta is not the first bank to disburse home loans based on “diversity.” 

In January mortgage-lending giant Wells Fargo announced it will only provide new home loans to minorities as the bank prepares to step back from the mortgage market. Whites who are existing Wells Fargo customers will also be eligible for mortgages. 

“Mortgage is an important relationship product, and our goal is to continue to be the primary mortgage lender to Wells Fargo bank customers as well as minority homebuyers. We are making the decision to continue to reduce risk in the mortgage business by reducing its size and narrowing its focus,” said Consumer Lending CEO Kleber Santos in a press release. “As the largest bank lender to Black and Hispanic families for the last decade, we remain deeply committed to advancing racial equity in homeownership.” 

The bank also announced a $100 million to “advance racial equity in homeownership” and the deployment of additional home mortgage consultants in “local minority communities.”