Texas vs California Mortgage Denial Rates — What the Latest Home Mortgage Disclosure Act (HMDA) Data Shows

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Last verified on: June 22, 2026

Editorial note: This guide is for educational planning and public-data comparison only. HMDA shows outcomes, not the full underwriting file behind each decision. This is not a fair-lending legal analysis, lender review, or financial advice.

Research Method

We aggregated 2025 home-purchase rows from the CFPB’s combined modified LAR file (published March 31, 2026), using FFIEC Modified LAR column positions for loan_purpose, action_taken, and state. We cross-checked our 2024 methodology against the FFIEC Data Browser API in May 2026. When we rechecked in June 2026, the Data Browser API still did not return 2025 year filters — the full annual file often lands before the interactive API catches up — so this update uses the LAR file for 2025 state totals.

We did not guess. We streamed the combined modified LAR, filtered to loan purpose = home purchase and actions 1-5, and summed Texas and California separately. Mortgage denial rates are YMYL data — the year label matters, and we would rather show our work than round up a stale API year.

Texas vs California Denial Rates in 2025 HMDA Data

This comparison uses loan purpose = home purchase and excludes purchased loans. The denominator includes final-action applications where the reported outcome was originated, approved but not accepted, denied, withdrawn, or closed for incompleteness.

Texas still shows the higher denial rate under this model. That has held in both 2024 and 2025 — the gap did not flip when we refreshed the file.

It still does not mean “Texas lenders are worse” or “California lenders are easier.” HMDA records outcomes across thousands of lenders and borrower profiles. It does not, by itself, explain why those outcomes happened.

2024 vs 2025: Did Anything Meaningful Shift?

We keep the prior-year row here so you can see whether the story changed or just the calendar year.

Both states saw a modest decline in denial share. California’s dropped a bit more, so the Texas-minus-California spread widened slightly. None of that replaces your own pre-approval conversation — it just tells you the statewide pattern did not reverse overnight.

Mortgage Denial Rates by State: How to Read This Comparison

Searches for mortgage denial rates by state usually need two things: a clean state-level rate and a clear explanation of the denominator. Without the denominator, one page may count all applications while another counts only home-purchase applications, and the percentages look like they contradict each other.

We focused on Texas and California because that is the comparison readers asked for most often. For a true national ranking, run the same filters on every state before you sort the list.

The rule we follow every time: do not compare a Texas purchase-loan denial rate with a California refinance denial rate, and do not mix purchased loans into an application denominator.

Full Outcome Breakdown (2025)

Denial rate is only one slice of the funnel. The full final-action mix shows where applications ended up in each state’s market.

California again shows a higher originated share. Texas shows a higher denied share and a higher closed-incomplete share — the same broad pattern we saw in 2024, even as the raw counts moved.

What Counts As A Denial Rate Here

This article uses a simple, reproducible calculation:

Denial rate = denied applications / final-action applications

The denominator includes:

• action 1: loan originated
• action 2: application approved but not accepted
• action 3: application denied
• action 4: application withdrawn
• action 5: file closed for incompleteness

The denominator excludes:

• action 6: purchased loans
• action 7: preapproval request denied
• action 8: preapproval request approved but not accepted

That is a practical buyer-facing rate, not the only valid HMDA rate. Researchers sometimes pick different denominators on purpose — which is fine, as long as they say so.

Why Texas May Look Higher Than California

HMDA does not hand you one clean cause for a statewide gap. A higher denial rate can reflect several overlapping factors:

• borrower income relative to local home prices
• debt-to-income ratios
• loan type mix, including Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), and conventional lending
• manufactured housing share
• credit profile differences
• property type and occupancy mix
• lender mix
• incomplete files and documentation patterns
• local market affordability pressure

Texas and California are both enormous, diverse markets. A statewide rate can hide very different pictures inside Houston, Dallas, Austin, Los Angeles, Riverside, San Diego, and the Bay Area.

How Buyers Should Use This Data

Think of denial rates as expectation-setting, not a personal approval score.

If you are getting ready to apply, these are the levers that actually show up in underwriting:

1. Estimate the full monthly payment before you shop rate quotes.
2. Check your debt-to-income ratio with the new payment included.
3. Confirm down payment and cash-to-close.
4. Review credit reports before a lender pulls credit.
5. Ask whether the loan type fits the property.
6. Keep documentation complete and current.

A state table can tell you the market is selective. It cannot tell you your result.

What This Means for Your Monthly Payment

Denials are not caused by payment math alone, but payment pressure is usually the first number buyers can model themselves.

If you are weighing Texas against California, do not stop at list price. The monthly payment shifts with:

• loan amount
• interest rate
• property tax
• homeowners insurance
• private mortgage insurance (PMI) or mortgage insurance
• homeowners association (HOA) dues
• local fees and special assessments

Use the Mortgage Calculator for a general payment estimate. For Texas-specific inputs, try the Texas Mortgage Calculator so property tax is easier to model.

Calculator Methodology

The mortgage calculator estimates the fixed principal-and-interest payment with the standard amortization formula:

Monthly P&I = L x [r(1 + r)^n] / [(1 + r)^n - 1]

Where:

• L is loan amount
• r is monthly interest rate
• n is the number of monthly payments

For affordability planning, the calculator can also model taxes, insurance, and PMI. We do not use it to predict approval — only to stress-test whether a payment looks realistic after you have seen the denial-rate context.

Common Mistakes When Reading HMDA Denial Rates

The biggest mistake is treating a state denial rate as your approval probability.

Other mistakes we see often:

• comparing rates without checking the denominator
• mixing home-purchase and refinance applications
• including purchased loans in an application denominator
• treating withdrawn files as denials
• assuming denial rates explain discrimination by themselves
• ignoring lender, loan type, income, and property mix
• using a 2025 headline when the underlying table is still 2024 data

The safer habit: state the year, source, filters, and denominator every time — exactly what we did above.

Official and Supporting Sources

• CFPB: 2025 HMDA Data on Mortgage Lending Now Available
• CFPB: 2024 HMDA Data on Mortgage Lending Now Available
• FFIEC/CFPB: HMDA Data Browser
• FFIEC: Modified LAR schema (field positions)
• CFPB: Home Mortgage Disclosure Act Data
• CFPB: Beginner’s Guide to Accessing and Using HMDA Data
• Daily Calcs Mortgage Calculator
• Daily Calcs Texas Mortgage Calculator

Next Step

Use the Mortgage Calculator to estimate the monthly payment behind a loan application. If you are modeling a Texas home, use the Texas Mortgage Calculator and include property tax, insurance, and PMI before you treat the payment as affordable.