d community factors are given more weight than income levels in probability determinations of loan repayment. The term "higher mortgage loan limits" is defined as increases in the maximum allowable mortgage for a specific annual income level. In effect, higher mortgage loan limits translate into lower down payment requirements for borrowers. The term "low- and moderate-income," as the term will be used in the proposed study refers to annual income levels below $35,000 in nominal terms.
A variety of factors enter into the determination of whether a residential mortgage will be granted. The proposed study will not attempt to evaluate the effects of all of these disparate factors. Rather, the research to be performed will be limited to a consideration of the effects of two policiesùrisk-based pricing and increased mortgage loan limitsùon the mortgage approval rates for low- and moderate-income households.
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