--- title: "Residential Real Estate Loans: definition, formula, and thresholds" description: "Residential Real Estate Loans (1-4 family mortgages) are loans secured by owner-occupied or investor-owned residential property with 1-4 dwelling units. Roughly $2.5T of bank-held 1-4 family loans makes this one of the largest single asset classes in US banking." canonical_url: https://www.bankregreports.com/glossary/residential-real-estate-loans/ source: BankRegReports category: "Asset Quality" units: "$" schedule: "Schedule RC-C" --- # Residential Real Estate Loans > Residential Real Estate Loans (1-4 family mortgages) are loans secured by owner-occupied or investor-owned residential property with 1-4 dwelling units. Roughly $2.5T of bank-held 1-4 family loans makes this one of the largest single asset classes in US banking. ## Formula ``` 1-4 Family Loans are reported on Call Report Schedule RC-C, Line 1.c. ``` The category captures first-lien and junior-lien mortgages secured by 1-4 family residential property, both owner-occupied and investor-owned. Home equity lines of credit (HELOCs) are reported on item 1.c.(1) and are included in the item 1.c total; closed-end first liens are item 1.c.(2)(a) and closed-end junior liens item 1.c.(2)(b). Loans sold and serviced for others are reported under fee income, not held loans. ## Why it matters 1-4 family loans are the largest US household debt category, over $13T total, of which roughly $2.5T is held on bank balance sheets (the rest is sold to agencies and securitized). For most community and regional banks, residential mortgages are a substantial share of total loans, particularly for thrifts and savings-oriented institutions. ## How to read it Residential RE / Total Loans varies enormously by charter type. Commercial banks typically run 15-30%; former thrifts may run 50%+; pure commercial lenders may run under 10%. The historical credit profile is favorable. Long-term 1-4 family charge-off rates run under 30bps, much lower than CRE or C&I. ## Thresholds | Range | Reading | What it means | |---|---|---| | < 15% of loans | Light | Commercial-focused lender. | | 15–35% | Typical commercial bank | Standard residential portfolio. | | 35–60% | Mortgage-focused | Thrift-style asset composition. | | > 60% | Pure mortgage | Heavy single-product concentration. | ## Worked example Wells Fargo Bank, N.A. reported $321B of 1-4 family residential loans at year-end 2024, about 33% of its total loan portfolio. The composition reflects Wells's historical strength in retail mortgage lending across its branch network. ## Questions ### Do banks hold every mortgage they originate? No. Roughly 70-80% of conforming residential mortgages are sold to Fannie Mae or Freddie Mac or pooled into Ginnie Mae-guaranteed securities. Banks typically retain jumbo loans, portfolio-product loans, and some adjustable-rate mortgages that don't conform to agency standards. ### Are HELOCs counted here? Yes. HELOCs are reported as 'revolving, open-end loans secured by 1-4 family residential properties' on item 1.c.(1), which is part of the item 1.c total. Closed-end junior liens are item 1.c.(2)(b). ### How does the historical credit profile look? Excellent. Outside the 2008-2011 housing crisis, bank-held 1-4 family loans charge off below 30bps annually. The crisis-era peak was approximately 250bps; current charge-offs are well under 10bps as the underwriting tightening of the post-Dodd-Frank era continues to dominate the held portfolio. ## Sources - [FFIEC Call Report Schedule RC-C, Line 1.c](https://www.ffiec.gov/sites/default/files/data/reporting-forms/FFIEC031_FFIEC041_202606_i.pdf) (PDF) - Federal Reserve Z.1 Financial Accounts: Household Mortgage Liabilities ## Related metrics - [Commercial Real Estate Loans](https://www.bankregreports.com/glossary/cre-loans/): Commercial real estate (CRE) loans are credit secured by income-producing or owner-occupied commercial property: office, retail, multifamily, industrial. They are the largest asset class at many community banks and the focus of intense supervisory attention since 2023. - [Multifamily Real Estate Loans](https://www.bankregreports.com/glossary/multifamily-loans/): Multifamily Loans are mortgages secured by residential properties with 5 or more dwelling units: apartment buildings, garden complexes, mid-rise rentals. Multifamily is the smallest CRE subcategory at most banks but the fastest-growing. - [Total Loans & Leases](https://www.bankregreports.com/glossary/total-loans/): Total loans and leases is the gross amount a bank has lent out (commercial, real estate, consumer, and agricultural credit) before subtracting the allowance for credit losses. It is usually a bank's largest asset and its primary earning engine. - [Net Charge-Offs](https://www.bankregreports.com/glossary/net-charge-offs/): Net charge-offs (NCOs) are the loans a bank has written off as uncollectible, less amounts recovered on previously charged-off loans. They are the realized credit losses that actually deplete the allowance. ## About this document This is the markdown twin of the page named in `canonical_url` above. Source filings are public record; the cleaning, normalization, cross-source linkage, and derived metrics are BankRegReports' own. Attribute with a link to the canonical URL. Markdown twins are published for editorial content only. Institution data pages do not have them. For data at scale use the API, which is documented at https://www.bankregreports.com/api/ and specified at https://www.bankregreports.com/openapi.json. It returns typed JSON with explicit units and periods, and one call replaces hundreds of page fetches. ## Sitemap - [Glossary](https://www.bankregreports.com/glossary/): every metric, with formula and thresholds - [Blog](https://www.bankregreports.com/blog/): analysis and explainers - [API documentation](https://www.bankregreports.com/api/): the programmatic way to get this data - [XML sitemap](https://www.bankregreports.com/sitemap.xml): the complete crawlable index