Redlining and Housing Discrimination

What Is Redlining

What to Do If You Face Redlining Today

Modern redlining rarely announces itself. It shows up as a denial with vague reasons, an appraisal that comes in low, or a lender that has no branch and no loan officer anywhere near your block. Federal law gives you a paper trail to request, and deadlines that start running on the day it happens.

Your steps after a denied loan or a low appraisal

1. 1 Within 60 days of a denial Ask for the reasons in writing The lender must give you the specific reasons within 30 days of your request.
2. 2 Before closing Get a copy of the appraisal For a home loan, the lender must send every appraisal promptly, or three business days before closing.
3. 3 Before closing Challenge a low appraisal Ask the lender in writing to reconsider the value, and send better comparable sales from your area.
4. 4 Up to 1 year File a HUD complaint HUD investigates at no cost to you. Lending problems can also go to the CFPB.
5. 5 Up to 2 years Sue in court A fair-housing lawyer or local fair-housing group can tell you whether you have a case.

Sources: 12 CFR 1002.9 and 1002.14 (Regulation B); 42 U.S.C. 3610 and 3613 (Fair Housing Act), via Cornell LII.

The deadlines come from the law itself. The Fair Housing Act gives you one year to file with HUD and two years to sue. Under Regulation B, a lender must give you the specific reasons for a denial and a copy of every appraisal on a first-lien home loan.

To check your own block’s history, find your address on the University of Richmond’s Mapping Inequality map, which has the original grades and surveyor notes for more than 200 cities. NCRC’s historic redlining score matches those grades to today’s census tracts.

How Federal Redlining Worked

Redlining began as federal policy with a paper trail. Two New Deal agencies graded neighborhoods by lending risk, and both treated the presence of Black residents as a risk in itself.

The Federal Housing Administration, created in 1934, insured the private mortgages that built the American middle class. From the start it refused to insure loans in low-income urban neighborhoods where most Black city residents lived. Its underwriting manual warned that “the infiltration of inharmonious racial groups” tended to lower land values, as the University of Richmond’s Mapping Inequality project quotes it.

The Home Owners’ Loan Corporation drew the maps people remember. Between 1935 and 1940 its surveyors graded more than 200 cities on four levels: green for “Best,” blue for “Still Desirable,” yellow for “Definitely Declining,” and red for “Hazardous.” Mapping Inequality reports that HOLC’s field agents treated the presence of African American and immigrant residents as a risk to home values. In one area otherwise identical to its B-graded surroundings, the surveyors assigned a D grade because “Three highly respected Negro families own homes and live in the middle block of the area.”

The result shows up in who got the loans. A 2026 study in Nature linked 29,921 FHA-insured and VA-guaranteed loans from 1935 to 1947 to Census records. Black borrowers received 2.1% of the FHA loans and 5.1% of the VA loans, while the country was 9.9% Black in 1940.

1. Federal insurer, from 1934 Federal Housing Administration Rated neighborhoods block by block and refused to insure loans in most Black urban areas ↓ Only FHA-approved areas get insured mortgages
2. Federal agency, 1935-1940 Home Owners' Loan Corporation Graded 200+ cities A through D and colored the lowest grade red, largely by race ↓ The grades record who counted as a risk
3. Lenders Banks and the FHA and VA pipeline Made insured loans in approved areas and avoided the rest ↓ Black borrowers get 2.1% of FHA loans, 1935-1947
4. Outcome A neighborhood starved of capital for decades No loans means no repairs, no equity, and no new owners. The disinvestment compounds.

Sources: Fishback, Rose, Snowden, and Storrs (NBER); FHA Underwriting Manual (1938); Nature (2026); Mapping Inequality.

Losing access to the mortgage cut a neighborhood off from the largest source of American family wealth for a generation. Owners could not borrow to repair or sell, buyers could not get in, and the disinvestment compounded after the law changed.

The legal history splits at 1968. The policies that built redlining ran from 1933 to 1968. The laws and enforcement meant to undo it came after, and since 2025 the federal government has scaled that enforcement back.

1. 1934 FHA begins redlining The new mortgage insurer declines to insure loans in most Black urban neighborhoods.
2. 1935-40 HOLC maps drawn Surveyors grade 200+ cities A through D, coloring the lowest grade red.
3. 1948 Shelley v. Kraemer The Supreme Court bars courts from enforcing racial covenants, but the covenants stay legal to write. (source)
4. 1968 Fair Housing Act Redlining and blockbusting are outlawed. No one redraws the maps.
5. 1974-77 ECOA, HMDA, and the CRA Credit discrimination is banned, lenders must report where they lend, and banks must serve the areas they take deposits from.
6. 2021-24 Combating Redlining Initiative The Justice Department reaches 15 settlements and more than $150 million in relief. (source)
7. 2025 Settlements ended early The Justice Department asks courts to end its redlining settlements early, and judges end at least five. (source)
8. 2026 Race-based credit programs barred A CFPB rule bars for-profit lenders from using race as a basis for special credit programs, as a judge keeps the Lakeland settlement in place. (source)

Sources: NBER; Mapping Inequality; Cornell LII; Justice Department; National Mortgage News; Federal Register.

From federal redlining to the enforcement rollback, 1934-2026: 1934: FHA begins redlining (The new mortgage insurer declines to insure loans in most Black urban neighborhoods.). 1935-40: HOLC maps drawn (Surveyors grade 200+ cities A through D, coloring the lowest grade red.). 1948: Shelley v. Kraemer (The Supreme Court bars courts from enforcing racial covenants, but the covenants stay legal to write.). 1968: Fair Housing Act (Redlining and blockbusting are outlawed. No one redraws the maps.). 1974-77: ECOA, HMDA, and the CRA (Credit discrimination is banned, lenders must report where they lend, and banks must serve the areas they take deposits from.). 2021-24: Combating Redlining Initiative (The Justice Department reaches 15 settlements and more than $150 million in relief.). 2025: Settlements ended early (The Justice Department asks courts to end its redlining settlements early, and judges end at least five.). 2026: Race-based credit programs barred (A CFPB rule bars for-profit lenders from using race as a basis for special credit programs, as a judge keeps the Lakeland settlement in place.).

The dates split cleanly. 1934: the FHA begins refusing to insure loans in most Black urban neighborhoods. 1935-1940: HOLC surveyors grade more than 200 cities and color the lowest grade red. 1948: in Shelley v. Kraemer, the Supreme Court bars courts from enforcing racial covenants. 1968: the Fair Housing Act outlaws redlining, but the marked neighborhoods stay marked. 1974-1977: the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act, and the Community Reinvestment Act ban lending discrimination and require banks to lend where they take deposits. 2021-2024: the Justice Department reaches 15 redlining settlements. 2025: the government begins asking courts to end them early. 2026: a new CFPB rule bars for-profit lenders from basing special credit programs on race.

What the 1930s Grade Predicts Today

The maps were never redrawn, so the neighborhoods they marked stayed marked. Pick a city, find a block graded red in the 1930s, and pull today’s data for it. The old grade still predicts the present.

1. D Rochester, MN · formerly red neighborhoods Grade D (Hazardous) · graded red in the 1930s
   →
   Today Life expectancy runs 14.7 years lower, the widest gap NCRC measured (source)
2. D Across 108 cities · formerly red areas Grade D (Hazardous) · graded red in the 1930s
   →
   Today Surfaces run about 2.6°C (4.7°F) hotter than areas not graded red (source)
3. D Across 41 metros · formerly red neighborhoods Grade D (Hazardous) · graded red in the 1930s
   →
   Today Homeowners gained $212,023 less in home equity over 40 years than in green areas (source)
4. D Nationwide · formerly red neighborhoods Grade D (Hazardous) · graded red in the 1930s
   →
   Today 8.25 million people live there today, more than 75% from a minority group (source)

Sources: NCRC; Hoffman, Shandas, and Pendleton (2020); Redfin.

The 1930s grade still predicts the block in 2026: Rochester, MN, formerly red neighborhoods was HOLC grade D (Hazardous). graded red in the 1930s. Today: Life expectancy runs 14.7 years lower, the widest gap NCRC measured. Across 108 cities, formerly red areas was HOLC grade D (Hazardous). graded red in the 1930s. Today: Surfaces run about 2.6°C (4.7°F) hotter than areas not graded red. Across 41 metros, formerly red neighborhoods was HOLC grade D (Hazardous). graded red in the 1930s. Today: Homeowners gained $212,023 less in home equity over 40 years than in green areas. Nationwide, formerly red neighborhoods was HOLC grade D (Hazardous). graded red in the 1930s. Today: 8.25 million people live there today, more than 75% from a minority group.

The heat, the lost equity, and the shorter lives trace back to the same cause. For decades, capital flowed into the green neighborhoods and skipped the red ones.

Why Redlined Blocks Run Hotter

Formerly redlined neighborhoods are measurably hotter than the rest of their cities, and the authors of the largest study tie part of the gap to more pavement and less tree canopy.

A 2020 study of 108 urban areas by Jeremy Hoffman, Vivek Shandas, and Nicholas Pendleton found that land surfaces in formerly redlined areas run about 2.6°C (4.7°F) hotter than in areas not graded red. The pattern held in 94% of the cities they studied, and in some the gap reached 7°C.

The authors write that the gap is partly attributable to more hard, heat-absorbing surfaces and less tree canopy in the redlined areas, and that other factors may also drive it.

The same neighborhoods carry a heavier pollution load. A 2022 study by Haley Lane, Rachel Morello-Frosch, Julian Marshall, and Joshua Apte compared 2010 air pollution with HOLC grades in 202 cities. Nitrogen dioxide, a traffic pollutant, ran more than 50% higher in grade D neighborhoods than in grade A ones, and pollution rose almost step by step with each lower grade. Within each grade, residents of color still breathed dirtier air, which the authors read as a sign that redlining was one of many discriminatory policies.

The Home Equity the Maps Stripped Out

Homeownership is how most American families build wealth, and redlining shut these neighborhoods out during the decades when that wealth compounded fastest. The gap did not close when the practice became illegal.

Redfin compared home equity growth across 41 metros over the 40 years to 2020. The typical homeowner in a formerly redlined neighborhood gained $212,023 less in home equity than one in a formerly green neighborhood, about 52% less. Black homeowners are nearly five times more likely to own in a formerly redlined neighborhood than in a green one.

Home equity gained over 40 years, redlined vs. greenlined neighborhoods

Period	Value
Greenlined home	Full gain
Redlined home	52% less
Change	-$212,023

Black homeownership fell in every HOLC grade from 1980 to 2017. In the green “Best” neighborhoods it dropped 6.4 points while the white rate rose to 71%, so the gap there grew from 16.5 to 27 points.

1980 2017

1. Grade A, "Best" 50.4% → 44.0% (−6.4 pts)
2. Grade B, "Still Desirable" 49.0% → 43.7% (−5.3 pts)
3. Grade C, "Definitely Declining" 39.9% → 35.9% (−4.0 pts)
4. Grade D, "Hazardous" 30.8% → 29.8% (−1.0 pts)

0%25%50%

Black homeownership rate by 1930s HOLC grade, 1980 and 2017

Group	1980	2017	Change
Grade A, "Best"	50.4%	44.0%	−6.4 pts
Grade B, "Still Desirable"	49.0%	43.7%	−5.3 pts
Grade C, "Definitely Declining"	39.9%	35.9%	−4.0 pts
Grade D, "Hazardous"	30.8%	29.8%	−1.0 pts

Neighborhoods in 41 metros, grouped by 1930s HOLC grade. Source: Redfin analysis of Census data.

The undervaluing continues today. A 2018 Brookings analysis found that owner-occupied homes in majority-Black neighborhoods are worth $48,000 less on average than similar homes with similar amenities in neighborhoods with few Black residents. That adds up to $156 billion in lost value.

Appraisals show the same gap. Freddie Mac reviewed 12 million purchase appraisals from 2015 to 2020, and in its 2021 study homes in Black census tracts came in below the contract price 12.5% of the time. In white tracts the figure was 7.4%.

Shorter Lives on the Red Side of the Line

The gap is also measured in years of life. NCRC compared 1930s grade maps with current public-health data and found that life expectancy in formerly redlined neighborhoods runs 3.6 years lower than in the highest-graded ones.

NCRC also found higher rates of asthma, COPD, diabetes, hypertension, kidney disease, obesity, and stroke in formerly redlined areas. These are the same conditions that raised the risk of severe COVID-19. Hotter summers, dirtier air, and fewer parks all land on the same blocks.

The pattern is not universal. In Ogden, Utah, which grew and redeveloped heavily after 1940, NCRC found life expectancy 1.3 years higher in the formerly redlined areas.

The Redlining Enforcement Being Undone

Redlining did not end in 1968, and federal regulators kept catching lenders who did it. In October 2021 the Justice Department launched its Combating Redlining Initiative with the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.

By October 15, 2024 the initiative had reached 15 settlements and more than $150 million in relief, which the Justice Department said is expected to generate over $1 billion in investment in communities of color. The settlements required lenders to open branches, subsidize loans or advertise in the neighborhoods they had avoided. The largest, more than $31 million, came from Los Angeles-based City National Bank on January 12, 2023, the largest redlining settlement in the department’s history (Justice Department).

In the Lakeland ruling, about $4 million of the bank’s $12 million loan-subsidy fund had not been paid out as of 2025, and the court wrote that “a promise to reach substantial compliance in the future is not substantial compliance.” The National Fair Housing Alliance, the Housing Equality Center of Pennsylvania and New Jersey Citizen Action Education Fund filed a friend-of-the-court brief urging the court to keep the order.

Reverse Redlining and Pricing Algorithms

Reverse redlining targets the same neighborhoods with high-cost, predatory loans instead of denying them credit. Where redlining refused to lend, reverse redlining lends on worse terms.

In December 2011, Countrywide Financial Corporation agreed to a $335 million settlement of Justice Department allegations that it charged more than 200,000 qualified Black and Hispanic borrowers higher fees and rates than similar white borrowers, and steered thousands into subprime loans (Justice Department).

The overcharging outlived the crisis. A study by UC Berkeley economists found lenders charged Latino and Black borrowers 7.9 basis points more on purchase mortgages than comparable borrowers, about $765 million a year in extra interest. The study found that fintech algorithms also discriminated, but 40% less than face-to-face lenders.

Where the Fixes Stand in 2026

Redlining’s damage is documented down to the census tract, so the remedies can be just as targeted. Each tool below already exists in law, and each changed in 2025 or 2026.

The same CFPB rule also removed disparate-impact liability from Regulation B, the rule that implements the Equal Credit Opportunity Act (Federal Register). Disparate impact let regulators challenge a lending policy that shut out a protected group without having to prove intent. The bank regulators’ 2025 proposal would replace the 2023 CRA rule with the rules first adopted in 1995 and reinstated in 2021 (OCC).

What Scholars and Regulators Still Debate

Did the HOLC maps cause the damage, or record it? Economists Price Fishback, Jonathan Rose, Kenneth Snowden, and Thomas Storrs found that the FHA was already refusing to insure loans in Black neighborhoods before the HOLC maps existed, using its own block-level data. HOLC itself lent broadly to Black homeowners. They conclude the famous maps had little effect on where either agency lent.

Chicago Fed economists Daniel Aaronson, Daniel Hartley, and Bhashkar Mazumder compared neighborhoods on either side of HOLC grade lines. They found the maps led to lower homeownership, home values, and rents and more racial segregation in later decades. Both studies find that federal housing policy shaped where credit went. They differ on how much the HOLC maps themselves did.

Should the law reach effects, or only intent? The CFPB’s 2026 rule concludes that the Equal Credit Opportunity Act does not authorize disparate-impact liability, and argues that the effects test can push lenders toward treating applicants differently by race to balance outcomes. Commenters who opposed the change told the CFPB that courts have consistently found the law authorizes disparate-impact claims, and that dropping them would undermine its purpose of making credit equally available (Federal Register).

What Counts as Redlining, and What Does Not

Redlining is a specific practice, and calling everything redlining weakens the cases that are. A few distinctions keep the line clear.

A denied loan is not automatically redlining. A lender can turn down an individual borrower for thin credit or low income. Redlining is when a lender writes off a whole neighborhood because of who lives there, whatever any one applicant’s credit looks like.

Blockbusting is a different scheme. Blockbusting agents scared white owners into selling cheap by warning that Black families were moving in, then resold the homes at a markup. The Fair Housing Act banned it in 1968, in the same law that banned redlining.

The maps did not invent segregation. Racial covenants, private lenders, and local zoning were already at work. In Shelley v. Kraemer (1948), the Supreme Court stopped courts from enforcing covenants, but writing them stayed legal until 1968. Federal policy hardened the pattern with federal money and left a paper record.

Other forces also shaped these neighborhoods. Researchers control for housing age, vacancy, and income, and the old grade still predicts outcomes. Highways, urban renewal, and industrial zoning also landed on many of the same blocks, and the Ogden exception shows that heavy later investment can change the result.

Frequently Asked Questions

Is redlining illegal? Yes. The Fair Housing Act of 1968 outlawed discrimination in housing and mortgage lending. The Equal Credit Opportunity Act, after its 1976 amendments, bans race discrimination in all credit. The Justice Department reached 15 redlining settlements from October 2021 to October 2024.

Does redlining still happen? Yes, in quieter forms. A lender may put no branches or loan officers in Black neighborhoods, market only to white suburbs, or approve so few loans in an area that the pattern shows up in the public lending data banks must report. The recent federal settlements all turned on patterns like these.

What is the difference between redlining and reverse redlining? Redlining withholds credit from a neighborhood because of its racial makeup. Reverse redlining floods the same neighborhoods with high-cost, predatory loans. Both are illegal forms of discrimination by geography.

Did redlining only affect Black neighborhoods? No. Mapping Inequality reports that HOLC’s agents also marked down neighborhoods with immigrant and, to a lesser extent, working-class white residents. The 2026 Nature study found that immigrants got FHA loans in line with their share of the population, while Black borrowers did not.

What You Can Do

1. Report discrimination if it happens to you. Ask the lender for its reasons in writing, get a copy of the appraisal, and file with HUD within one year. A local fair-housing group can help you decide whether to sue within two years.
2. Ask your bank what it lends where you live. Lenders’ mortgage data is public under the Home Mortgage Disclosure Act. Ask your bank and your city’s housing office how many loans go to your neighborhood, and raise the answer at a council meeting.
3. Support the fair-housing groups that go to court. The National Fair Housing Alliance and two regional groups filed a brief asking the court to keep the Lakeland settlement after the government moved to end it.
4. Tell Congress to hold the Justice Department to its redlining settlements. Ask your representative and senators by name to press the department to stop seeking early termination of the orders still in force. Use the letter below.