“Through its selective and racially informed implementation of mortgage insurance, the FHA actively helped create American Apartheid.”

Lynne B. Sagalyn, “Housing on the Installment Plan” (Cambridge, MA: MIT Ph.D. dissertation, 1980)

NEW DEAL 1932

In response to the Great Depression, the US government implemented an economic program known as the New Deal. This had three aims: relief for the poor, recovery of the economy, and reform of financial systems. It consisted of a series of measures enacted between 1933 and 1936. One of these strategies, designed at protecting the future housing market, involved the formation of three agencies:

1. The Federal Home Loan Bank Board (FHLBB)

2. The Home Owners' Loan Corporation (HOLC)

3. The Federal Housing Administration (FHA)

The underwriting practices of these agencies were informed by a racist ideology, resulting in minority areas and races being systematically deprived of financial support.