Many years ago, this practice was endorsed by which organization?

• A. The Federal Housing Administration (FHA)
• B. The Home Owners' Loan Corporation (HOLC)
• C. The United States Department of Housing and Urban Development (HUD)
• D. The American Planning Association

Answer: (B)

Redlining refers to the practice of denying or limiting mortgage lending in certain neighborhoods based on racial or socioeconomic composition. In the 1930s, the Home Owners' Loan Corporation produced Security Maps that graded neighborhoods and colored many minority- and lower-income areas as high risk. This official classification guided lenders to avoid or restrict mortgages in those areas, effectively endorsing discriminatory financing practices. The organization responsible for initiating and backing this approach was HOLC, whose maps and policies set the precedent for how lending would be handled in those communities. While later underwriting practices by other entities reinforced similar patterns, HOLC is the one most closely associated with the original endorsement of this practice.