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Redlining: A History of Discrimination in Mortgage Lending

Closeup of a Pushpin In a Map of RockledgeRedlining is a term that a lot of people have tried but could not understand the facts of. Simply put, redlining is the systematic discrimination of certain groups of people in areas like housing and mortgage lending. This way has a lengthy and difficult history, and it continues to affect minority communities to this day. In this blog post, we will explore redlining, how it works, and its effects on generations of Americans.

What is Redlining?

Redlining is a term that was coined in the 1930s by John McKnight, a sociologist from Northwestern University. He employed the term to describe the practice of banks and other financial institutions drawing lines on maps to describe which areas they regard as too risky to lend money in. These “redlined” areas were normally neighborhoods that were home to minority groups like African Americans, Latinos, and Asians.

In practice and theory, redlining is discriminatory and illegal. The goal of redlining is to put financial and other services, including loans, mortgages, and insurance, out of reach for certain people in certain areas. This precludes these people from buying homes and owning businesses in these places. The areas most likely to be redlined are black inner-city neighborhoods and those that are considered “slums” or have a high crime rate. Yet, these descriptions are regularly arbitrary and built on outdated or erroneous information.

The History of Redlining

Redlining has its roots in the early 20th century when the US government began to insure loans made by banks. The government did this to boost lending and help people buy homes. Though, these policies had the accidental consequence of letting banks discriminate against some categories of people.

In 1934, the Federal Housing Administration (FHA) was created. The FHA’s job was to insure mortgages, which made them much less risky for banks. This authorized banks to lend money to people with lower incomes and credit scores. However, the FHA’s guidelines for lending were based on race. They openly said that loans should not be made in “residentially unstable or declining neighborhoods,” normally minority neighborhoods.

Redlining Today

The effects of redlining are still being felt these days. Studies have shown that minorities living in redlined neighborhoods are more often denied loans and insurance and often pay higher interest rates when they can get financing. This has led to a cycle of disinvestment in these communities, as property values decline and families are obliged to move.

Redlining is a difficult issue with a long history, but then minority communities across the country are still suffering its effects. For renters, redlining can make it tricky to find affordable housing. For homeowners, it can lead to higher interest rates and insurance premiums. And for everyone, it can cause further disinvestment in already-struggling neighborhoods.

If you think that redlining has hurt your ability to find affordable Rockledge housing, some organizations can help. The National Fair Housing Alliance is a good resource for finding housing counselors and legal assistance. Bear in mind, you have rights, and redlining is illegal. With knowledge and resources, you can fight back against this discriminatory practice.


It is also important to rent from a trustworthy company that does not tolerate illegal practices like redlining. Real Property Management Brevard is dedicated to fair housing and equal opportunity for all renters. We believe that everyone deserves a safe and affordable place to call home. Talk to one of our Rockledge property managers to learn more about our properties and how we can help you find the perfect rental home. Or, you can browse our listings online.

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

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