The Home Owners' Loan Corporation, created in 1933, and the Federal Housing Administration, established by the National Housing Act of 1934, reshaped American mortgage lending. From 1935 the HOLC produced colour-coded 'residential security' maps that graded neighbourhoods by lending risk, marking areas with significant Black or immigrant populations in red. FHA underwriting standards similarly favoured racially homogeneous, restrictive-covenanted suburbs and discouraged lending in older mixed districts. Together these federal practices, known as redlining, channelled credit toward white suburbs and starved many inner-city neighbourhoods of investment.
Federal redlining institutionalised racial segregation in housing finance and left a lasting imprint on the wealth and form of American cities.
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