Asset Quality
Residential Real Estate Loans
Also known as 1-4 Family 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
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 separately on Line 1.c.1.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 interpret
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 | Label | Interpretation |
|---|---|---|
| < 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
Frequently asked
Do banks hold every mortgage they originate?
No. Roughly 70-80% of conforming residential mortgages are sold to Fannie Mae, Freddie Mac, or Ginnie Mae and securitized. Banks typically retain jumbo loans, portfolio-product loans, and some adjustable-rate mortgages that don't conform to agency standards.
Are HELOCs counted here?
No. HELOCs are reported separately as 'revolving open-end loans secured by 1-4 family residential properties' on Line 1.c.1.b. Closed-end second mortgages are on Line 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
- Federal Reserve Z.1 Financial Accounts — Household Mortgage Liabilities
See 1-4 Family Loans across 4,335 US banks
BankRegReports ranks every FDIC-insured institution by 1-4 Family Loans, refreshed quarterly within 48 hours of FFIEC release.