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A 2026 study of California mortgages found that fintech lenders—firms that originate mortgages primarily online and use automated underwriting—were more likely than traditional lenders to approve loans in high-wildfire-risk neighborhoods and charged lower rates on approved loans there. That is a finding about historical data, not a promise that an online lender will give you a better quote today. The study analyzed California loans from 2018–2020, so buyers should compare current offers for the same property and borrower profile, while checking homeowners insurance early in the process.
What the study found about mortgage approvals and rates
Haupert and Keenan’s article in the Journal of Planning Education and Research, first published online September 25, 2026, combines 2018–2020 loan-level data from the Home Mortgage Disclosure Act (HMDA), a lender dataset classifying firms as fintech or traditional, and wildfire-risk scores from FEMA’s National Risk Index. The authors used logistic and ordinary least squares models with controls. Their findings describe associations in that study sample; they do not establish what any particular buyer will be offered now.
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- Across lenders: Loans in high-wildfire-risk neighborhoods were approved less often and had higher interest rates than loans in neighborhoods with no or low wildfire risk.
- Fintech versus traditional lenders in high-risk areas: Fintech lenders were more likely to approve loans and assigned lower rates to approved loans.
- Fintech loans across risk levels: Fintech lenders were statistically equally likely to approve loans in high-risk and no- or low-risk neighborhoods. Their rates were significantly lower in high-risk areas than in no- or low-risk areas.
“Online lender” here means the study’s fintech category, not every mortgage company that lets customers submit an application on a website. The classification belongs to the researchers’ dataset.
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The findings do not show that wildfire risk caused a specific rate or approval decision. They also do not report a current lender ranking or tell you how much an individual borrower could save. Results from California loans made in 2018–2020 should not be assumed to apply to every borrower, location, loan type, or current market.
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How to compare mortgage offers for a specific home
Get current quotes using the same assumptions. A rate comparison is misleading if lenders are pricing different loan amounts, down payments, terms, or points. Ask for comparable written estimates and review more than the advertised interest rate.
- Keep the scenario consistent. Give each lender the same borrower and property details, loan amount, loan type, down payment, and loan term.
- Compare the full loan terms. Review interest rate and annual percentage rate (APR), lender fees, discount points or credits, and the rate-lock period. APR can help capture certain loan costs, but check the itemized fees and points as well.
- Check the insurance assumptions. Mortgage estimates may not reflect the final homeowners-insurance premium. Use a property-specific insurance quote when estimating monthly housing costs.
- Compare the total monthly obligation. Add principal and interest, property taxes, homeowners insurance, and any applicable mortgage insurance or homeowners association charges. A lower mortgage rate does not by itself mean a lower total housing cost.
- Confirm the loan remains feasible. Before relying on an offer, make sure the property can be insured on terms acceptable to you and your lender, and ask how changes to the insurance premium or coverage could affect the transaction.
The study does not establish that fintech lenders will be cheaper for your circumstances. Use contemporaneous estimates for your property and borrower profile rather than treating the historical result as a recommendation.
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Why homeowners insurance can affect the purchase
Mortgage lenders require homeowners insurance covering a range of losses. Wildfire damage is generally covered by private insurers, but greater disaster risk and uncertainty can push premiums higher or make coverage difficult to obtain or afford. If regulators do not allow premiums to rise to reflect risk, insurers may withdraw from high-risk areas, according to the Congressional Budget Office (CBO).
In broad natural-disaster context—not wildfire losses alone and not California alone—insurers covered $80 billion of $114 billion in disaster losses in 2023, leaving 30% uninsured, the CBO reported in 2024. The figures illustrate that insurance does not cover every disaster loss; they are not a measure of a wildfire-area homeowner’s likely claim or premium.
California data underline why it is prudent to check coverage early. A 2026 U.S. Government Accountability Office analysis of 2020–2023 ZIP-code data found that severe- or extreme-risk wildfire ZIP codes had an approximately 12-percentage-point higher share of properties on the California FAIR Plan than minor-to-moderate-risk ZIP codes. The GAO also reported that FAIR Plan residential policies rose from about 200,000 in 2020 to approximately 450,000 in 2024; about 78% of that growth was in areas with major, severe, or extreme fire risk. These are associations and program counts, not proof that wildfire risk alone caused the changes.
Ask an insurance agent or insurer about availability, premium, coverage limits, deductibles, and any conditions for the exact property before you commit to a purchase. If standard coverage is unavailable or unaffordable, ask what other coverage options apply and confirm with your mortgage lender whether a proposed policy satisfies its requirements. Insurance cost and availability can change affordability and closing feasibility.
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What California wildfire maps do—and do not—tell you
CAL FIRE Fire Hazard Severity Zone maps are intended to inform local planning; the California Department of Insurance says they are not used by insurers to set insurance rates or make underwriting decisions. Insurers use wildfire risk models instead, and the department says its strategy requires catastrophe models to account for mitigation measures. A map designation alone therefore does not predict whether a property can be insured or what its premium will be.
Mitigation may affect modeled risk, but that is not the same as a guaranteed insurance discount or better mortgage terms. A March 2026 announcement from the California Department of Insurance and the National Association of Insurance Commissioners reported modeled average annual loss reductions in the Palisades and Eaton fire areas of 31% under IBHS Wildfire Prepared Home Base and 35% under Wildfire Prepared Home Plus, compared with standard construction. These are modeled insurance-loss estimates for those areas, not promises about an individual property’s premium, lender decision, or mortgage rate.
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Is there a special mortgage for people buying in a fire-risk zone?
HUD’s FHA Section 203(h) program is a disaster-recovery option, not a standing discount for anyone buying in a wildfire-prone area. It insures mortgages for qualified victims whose homes were destroyed or severely damaged in a Presidentially declared disaster area and who are buying or rebuilding a principal residence. HUD says no down payment is required, but mortgage insurance premiums apply and the application must go through a lender within one year of the President’s disaster declaration. Check current requirements with HUD and an FHA-approved lender.
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