If you dream of owning a home but don't make a lot of money, you may think your only option is to continue renting. However, a CRA mortgage might make your dream a reality. What is CRA? We'll answer that question below and explain how it relates to the mortgage process.

What is CRA?

CRA is an acronym for the Community Reinvestment Act, a U.S. law enacted in 1977 designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities and to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

Under revisions in May 1995 and August 2005, a bank’s CRA performance is evaluated by various bank regulators, including the Federal Reserve and the FDIC, among others. Some banks refer to these loan products as "portfolio loans."

While there are CRA programs in every state, they vary according to the individual banks but they remain a way for income-challenged people to get a home and their slice of the American dream.