government program was created, also under President Roosevelt’s New Deal, was the Federal Housing Administration. The FHA devoted most of its attention to new loans by subsidizing the terms, making them a lot more affordable. What made the FHA so effective in providing loans to even those who would have never qualified was the guarantee of repayment to commercial lenders; the banks couldn’t lose. The FHA also introduced longer terms, which went from the typical 5-10 year loans into 15-20 year loans. The FHA also included low down or even no down payments, and level-payment mortgages as opposed to the old balloon notes from the previous years. It was indeed a lifesaver, but only for those who the lenders saw fit. They had to be white, of working or middle class. This proved to be critical after WWII when the program had to expand
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This would enable “white flight” from the inner city life and give new life to America’s suburbs.
Arguments could be made to the involvement of racist tactics geared towards African Americans and minorities of the actions of the FHA. Some would argue that it was just a matter of good business tactics and procedures while others may say that it was a direct attack on the welfare of disadvantaged, poor minorities. With the exposure of the processes, methods of evaluations and risk rating procedures clearly outlined in the FHA’s Underwriting Manual, these arguments could be put to rest. Looking at part 2, section 228 in the “Rating a Location: Protections from Adverse Influences” part of the manual it clearly states: Deed restrictions are apt to prove more effective a zoning ordinance in providing protection from adverse influences. Where the same deed restrictions apply over a broad area and where these restrictions relate to types of structures, use to which improvements may be put, and racial occupancy, a favorable condition is
This would enable “white flight” from the inner city life and give new life to America’s suburbs.
Arguments could be made to the involvement of racist tactics geared towards African Americans and minorities of the actions of the FHA. Some would argue that it was just a matter of good business tactics and procedures while others may say that it was a direct attack on the welfare of disadvantaged, poor minorities. With the exposure of the processes, methods of evaluations and risk rating procedures clearly outlined in the FHA’s Underwriting Manual, these arguments could be put to rest. Looking at part 2, section 228 in the “Rating a Location: Protections from Adverse Influences” part of the manual it clearly states: Deed restrictions are apt to prove more effective a zoning ordinance in providing protection from adverse influences. Where the same deed restrictions apply over a broad area and where these restrictions relate to types of structures, use to which improvements may be put, and racial occupancy, a favorable condition is