HMDA Action Codes: Rules and Reporting
Reglith Editorial Team · October 2026
HMDA action codes are the numeric values that describe what happened to a loan application or covered loan under the Home Mortgage Disclosure Act (HMDA) and Regulation C. Regulation C, at 12 CFR 1003.4(a)(8)(i), requires reporting the action taken on each application or covered loan; the eight numeric codes, 1 through 8, come from the CFPB's HMDA Filing Instructions Guide, not the regulation text. Getting the right code on each record matters because lenders and regulators use the data to spot lending patterns.
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What are the HMDA action taken codes?
The eight standard codes, as numbered in the CFPB's Filing Instructions Guide, generally mean:
- 1 – Loan originated. The institution made the loan.
- 2 – Application approved but not accepted. The institution approved the application but the applicant did not proceed.
- 3 – Application denied. The institution denied the application.
- 4 – Application withdrawn. The applicant withdrew before a credit decision.
- 5 – File closed for incompleteness. The file was closed because the applicant did not provide required information.
- 6 – Purchased loan. The institution purchased a covered loan.
- 7 – Preapproval request denied. A preapproval request was denied.
- 8 – Preapproval request approved but not accepted. The request was approved but the applicant did not proceed.
Codes 1 through 4 are an origination, an approval the applicant did not accept, a denial, or the applicant's withdrawal before a decision. Codes 5 through 8 cover files closed for incompleteness, purchased loans and preapproval requests. The distinction matters because it drives which records are reportable and which denial reasons are required.
Action taken versus application status
"Action taken" is the institution's final disposition of an application or covered loan. "Application status" is an internal concept describing interim pipeline steps: received, under review, conditional approval, suspended, pending documentation. These are not HMDA codes. Mixing a pipeline status into a reportable action taken field is a common exam finding.
Which action codes apply to reportable loans?
Which action codes produce a loan-level record should be confirmed against the rule text and the Filing Instructions Guide. Whether a particular record is reportable also turns on whether the application was for a covered loan under Regulation C, which depends on the institution's size, location and the loan's purpose and property type. Those asset thresholds are adjusted annually, so check the current rule text rather than a fixed figure.
The nuance for code 4 (withdrawn) deserves attention. If the application was complete and the institution had the authority to make a credit decision, the file is reportable even if the applicant walked away. Whether your institution's file is "complete" for this purpose can vary by product and state law; on borderline calls, check the rule text and your regulator's guidance.
For a broader walkthrough of HMDA data collection and filing, see the HMDA Reporting: The Complete Guide for Mortgage Lenders.
| Code | Meaning | Reportable loan-level record? |
|---|---|---|
| 1 | Loan originated | Generally yes |
| 2 | Approved but not accepted | Generally yes |
| 3 | Denied | Generally yes |
| 4 | Withdrawn | Generally yes if complete |
| 5 | File closed for incompleteness | Often, depending on filing rules |
| 6 | Purchased loan | Yes for covered purchased loans |
| 7 / 8 | Preapproval denied / approved not accepted | Yes, where preapproval requests are covered |
How do denial reason codes interact with action codes?
Denial reason codes are required for denied applications (code 3); check the Filing Instructions Guide for how denied preapproval requests (code 7) are handled. The primary reason for denial categories include credit history, debt-to-income ratio, collateral, and other. Up to several reasons may be reported; the regulation limits how many must be listed, and the exact count is in the rule text.
When the action taken code is 3 but the denial reason field is blank or inconsistent, the record fails validation. When the code is 2 and a reason is filled in, that also triggers an edit failure. The mapping is strict, and regulators read mismatched records as weak data quality.
Common mismatch patterns
- Code 3 with no denial reason recorded because the underwriter's note was not captured in the LOS field.
- Code 2 (approved but not accepted) with a denial reason inherited from an earlier pipeline step.
- Code 4 (withdrawn) with a denial reason recorded even though no credit decision was made.
What are the common HMDA data validation errors for action codes?
Data validation edits flag internal inconsistencies and likely misclassifications. Recurring problems include:
- Reporting code 4 (withdrawn) for a file that was actually denied (code 3). This often happens when the borrower stopped cooperating after a denial letter was sent.
- Reporting code 5 (file closed for incompleteness) when the file was denied on the merits. The rule distinguishes a closed-incomplete file from a denied one, and treating them interchangeably creates both validation errors and fair lending questions.
- The "incomplete" trap: failing to report an application that was incomplete but where a decision was made. A decision on an incomplete file can still trigger reportability.
- Preapproval requests coded as ordinary applications, or vice versa.
HMDA data validation rules check combinations of action taken and denial reason codes. Failing an edit blocks submission until corrected or explained, and repeated failures in the same field attract examiner attention.
For denial, withdrawal and data quality issues in one place, see the hmda getting it right guide.
Where can I find the official HMDA data dictionary?
The CFPB publishes the definitive data dictionary for HMDA filing, listing each field, its code values and definitions. The HMDA Annual Filing Instructions are the operational guide for code selection, including worked examples for edge cases. Use the data validation tool to test code combinations before submission so errors surface while there is still time to correct them.
Where to look for HMDA rules underlying the codes
- Regulation C, 12 CFR Part 1003, for the action taken definitions and reporting thresholds.
- The CFPB's Filing Instructions Guide for code-by-code selection guidance.
- Your federal supervisory agency's examination procedures where they add detail.
How to use a codes cheat sheet
A one-page HMDA codes cheat sheet can help loan originators and underwriters code files consistently at the point of decision. Build yours directly from the regulation and the Filing Instructions Guide, and refresh it whenever the CFPB updates the dictionary. Cross-check with the The Complete Guide to Federal Mortgage Compliance Regulations for how Regulation C fits alongside Regulation Z, RESPA and Regulation B.
How do action codes affect fair lending and UDAAP risk?
Action taken codes are the primary field regulators mine for patterns. Systematic miscoding — denials coded as withdrawals, or incomplete files coded as denials — can distort denial-rate analysis and hide disparate impact that would otherwise be visible under the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act.
Incorrect coding can also create Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) exposure if a borrower was led to believe an application was pending when it had effectively been decided, or was told a file was withdrawn when a decision had been made. Accurate, timely coding helps keep the record straight.
Practical steps for compliance teams
- Build a document crosswalk from LOS statuses to HMDA action taken codes and denial reason codes, and review it whenever the system changes.
- Run a pre-filing validation pass and resolve every action taken and denial reason exception.
- Train loan officers and underwriters on the codes annually, with examples drawn from your own files.
- Sample coded files during quality control and compare the code against the credit decision in the file.
- Track the fields that fail validation most often and feed those findings back into training and system edits.
For the broader anti-discrimination framework that uses this data, see the Fair Lending Compliance: The Complete Guide for Mortgage Lenders. Accurate HMDA coding also supports recordkeeping expectations shared across the mortgage rules, from TRID disclosures under the TILA-RESPA Integrated Disclosure rule to RESPA servicing obligations under Regulation X. Institutions subject to the SAFE Act and licensing requirements should also confirm that loan originators are properly registered in NMLS, since data accuracy and licensing records are examined together at many institutions; see Mortgage Licensing and NMLS: The Complete Compliance Guide. Institutions with Bank Secrecy Act / Anti-Money Laundering (BSA/AML) programs should note that HMDA coding feeds into the broader compliance management system, alongside FCRA and UDAAP controls.
Frequently asked questions
What are the common HMDA denial reason codes used for?
Denial reason codes record why an application was denied. They are required for denied applications (code 3); check the Filing Instructions Guide for how denied preapproval requests (code 7) are handled. Categories include credit history, debt-to-income ratio, collateral and other. Regulators use the reasons to analyze denial patterns across protected classes. Missing or mismatched denial reasons are a common validation failure and an examination focus.
What are the categories of loans that must be reported under HMDA?
Coverage depends on the institution's size and location, plus the loan's purpose and property type. Closed-end residential mortgages, open-end lines of credit secured by a dwelling, and certain home improvement loans generally fall in. Exemptions exist for some small institutions and certain loan types. Asset thresholds are adjusted annually, so consult the current rule text.
Where can I find HMDA data?
The CFPB publishes modified loan-level data and aggregate reports on its public HMDA platform, along with the data dictionary and Filing Instructions Guide. Institution-level and geographic breakdowns are available there. Supervisory agencies use both public and non-public data in examinations, so the public dataset is a useful self-review tool.
Is a withdrawn application reportable under HMDA?
Sometimes. A withdrawn application is generally reportable if it was complete and the institution had authority to make a credit decision. If the file was never complete enough to decide, a different code may apply. The distinction turns on the facts of the file and the rule text.
What is the difference between action taken code 4 and 5?
Code 4 means the applicant withdrew. Code 5 means the institution closed the file for incompleteness because required information was not provided. The distinction affects denial reason requirements and fair lending analysis, and the two are frequently confused in practice.