The federal and private practice, codified in the 1930s, of rating Black neighborhoods as “hazardous” and denying them mortgage credit.
Redlining takes its name from the color-coded “residential security” maps drawn by the Home Owners’ Loan Corporation (HOLC), a New Deal agency created in 1933 to refinance mortgages in danger of foreclosure. Between 1935 and 1940 the HOLC’s City Survey Program graded neighborhoods in 239 cities into four tiers: green for “Best,” blue for “Still Desirable,” yellow for “Definitely Declining,” and red for “Hazardous.” Appraisers treated the presence of Black residents as a mark of risk, and majority-Black districts were disproportionately shaded red.
Historians now stress that the HOLC maps circulated among relatively few officials and that the agency made most of its loans before they were drawn. The more lasting damage came from the Federal Housing Administration, created by the National Housing Act of 1934, which insured the mortgages that financed the postwar suburbs. The FHA’s 1935 Underwriting Manual told appraisers to investigate “incompatible racial and social groups” and to value barriers against their “infiltration.” Combined with racially restrictive covenants — such as the one that neighbors sued to enforce against Lorraine Hansberry’s family in Chicago — these rules shut most Black families out of the era’s greatest engine of household wealth.
The Fair Housing Act of 1968 outlawed overt redlining, but its effects endure. A study by the National Community Reinvestment Coalition found that 74 percent of the neighborhoods the HOLC graded “Hazardous” are low-to-moderate income today and that nearly 64 percent are majority-minority. The term is now used more broadly for any practice of denying credit, insurance, or services on the basis of a neighborhood’s racial makeup.
See also: Great Migration, Jim Crow, Civil Rights Act of 1964, Forty Acres and a Mule
Sources
- Franklin D. Roosevelt Presidential Library and Museum, “FDR and Housing Legislation.” Link
- Trinity College, “Federal Lending and Redlining,” On The Line: How Schooling, Housing, and Civil Rights Shaped Hartford and Its Suburbs. Link
- National Community Reinvestment Coalition, “HOLC ‘Redlining’ Maps: The Persistent Structure of Segregation and Economic Inequality.” Link
- National Archives and Records Administration, “The Great Migration (1910–1970).” Link
- Digital Scholarship Lab, University of Richmond, Mapping Inequality: Redlining in New Deal America. Link
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By the Black-History.com editors. Last reviewed 30 September 2026. To suggest a primary source or a correction, write to editors@black-history.com or use our corrections form.