Redlining and the Home Owners' Loan Corporation

Amy Elizabeth Hillier, University of Pennsylvania


The Home Owners' Loan Corporation, created in 1933 to help urban homeowners avoid foreclosure, developed a series of residential security maps for cities across the country. These maps deemed areas with African Americans and other perceived threats to real estate values “hazardous” and colored them red. Historian Kenneth Jackson discovered the maps in the 1970s and connected them to redlining in Crabgrass Frontier. Subsequent research has consistently cited the role of these maps in urban disinvestment, promoting the idea that HOLC caused redlining. But none of this research has provided specific evidence that lenders used HOLC's maps to decide where to make loans, that other sources of information did not influence their decisions, or that the impact of HOLC's maps was independent of lending patterns that predated HOLC. Using a combination of social science and historical methods, this dissertation tested whether the residential security map created for Philadelphia impacted residential mortgage outcomes between 1939 and 1950. Geographic Information Systems (GIS) technology was used in conjunction with spatial statistical models to analyze address-level mortgage data. This dissertation also considered where HOLC made its own loans in Philadelphia and how the residential security map for Philadelphia was created. Results indicate that HOLC's maps did not cause redlining. HOLC grade does not explain differences in the number, loan to value ratios, or types of lenders of residential mortgages in sampled areas of Philadelphia, although mortgages made in areas with worse grades did have slightly higher interest rates. Archival material and journal articles from the 1930s also revealed that lenders were avoiding areas colored red before HOLC mapped its maps, that HOLC's maps were not widely distributed, and that lenders had access to many other sources of information about real estate risk levels. HOLC made the majority of its loans to areas it colored red, demonstrating that the agency did not practice redlining, itself. These findings suggest that additional research is needed into alternative explanations of redlining, particularly relating to the role of the Federal Housing Administration and private lenders in creating their own maps and standards for neighborhood appraisals.

Subject Area

American history|Urban planning|Area planning & development|Welfare

Recommended Citation

Hillier, Amy Elizabeth, "Redlining and the Home Owners' Loan Corporation" (2001). Dissertations available from ProQuest. AAI3003637.