The Color of Law

The FHA discouraged banks from making any loans at all in urban neighborhoods rather than newly built suburbs; according to the Underwriting Manual, “older properties . . . have a tendency to accelerate the rate of transition to lower class occupancy.” The FHA favored mortgages in areas where boulevards or highways served to separate African American families from whites, stating that “[ n] atural or artificially established barriers will prove effective in protecting a neighborhood and the locations within it from adverse influences, . . . includ[ ing] prevention of the infiltration of . . . lower class occupancy, and inharmonious racial groups.”