Young family cheers and smile as they unpack moving boxes in their new home after receiving support from CRA.

What is the Community Reinvestment Act?


The Community Reinvestment Act (CRA) encourages banks to help first-time homebuyers and borrowers. Learn more about CRA.

First-time homebuyers play a critical role in the health of any housing market and the vitality of their broader communities. When real estate professionals and lenders put out the welcome mat for these buyers, regardless of their income, everyone stands to benefit. Homeownership is a great way to establish wealth, build a stronger financial future, and is typically a better long-term financial option than renting.

Today, most financial institutions recognize that making housing accessible to more buyers, including first-time homebuyers and low-to-moderate income homebuyers, contributes to the overall economic health in the places where they do business.

While this philosophy is widely accepted today, it began to take root as a result of the Community Reinvestment Act, or CRA, which was enacted in 1977.

This U.S. law encourages banks to meet the credit needs of all customers with specific emphasis on low- to moderate-income borrowers and communities. Regulators assess how well they fulfill these obligations and then factor their assessment into their approvals of mergers, charters, branch openings and other activities. (Regulators make these “CRA ratings” available online, and banks make available at local branches.)

It’s important to note that CRA is not a loan product or program. Rather, it encourages banks to include low- and moderate-income customers and communities in their lending and investing practices in a safe and sound business manner. Examples of activities receiving favorable consideration include activities targeted toward affordable housing, small business lending, and revitalizing or stabilizing low- to moderate-income neighborhoods.

From the perspective of real estate professionals, it’s helpful to understand the wide range of affordable and first-time-buyer programs, both local and national. This is true not just for agents and brokers who focus on this segment but everyone in the industry. Better information about these programs supports economic growth and housing stability across markets. Meanwhile, CRA ratings say a lot about a bank’s track record of lending and investing and its overall commitment to the communities it serves. At a time when many would-be buyers are facing challenges related to the COVID-19 pandemic and economic uncertainty, homeownership and community become even more important. We remain steadfast in our commitment to all borrowers and communities, not because it is required but because we believe it is the right thing to do.

To learn more about Fifth Third’s commitment to affordable and first-time ownership, or learn about specific programs, visit Empowering Communities.

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