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Mission Matters - September 2022

Why do White Americans have on average 13 times more wealth than African Americans? There have been government policies after the Civil War that have led to this disparity. Bread for the World has documented some of these policies. Here is their Policy # 3 contributing to the gap.

Minding the Gap: Policy #3 The National Housing Act of 1934, Part 1

Policies under this law guaranteed federally-backed loans to whites and legally refused loans to blacks and anyone else who chose to live in or near black neighborhoods. This practice, known as “redlining,” targeted entire black neighborhoods and identified them as “Grade D.” This made it nearly impossible for appraisers in the private sector to do business in black neighborhoods because all the residents were considered bad credit risks.

How does inequality in access to home loans contribute to the racial hunger, income, and wealth gaps?

Homeownership is the primary way for American families of modest means to build wealth. African Americans have been denied equitable access to mortgage loans, and therefore homeownership, for roughly the past four generations. Areas with a low rate of homeownership have fewer assets, equity, and resources. Consequently, African American neighborhoods are far more likely than white neighborhoods to have areas of concentrated poverty, meaning that a sizeable proportion of residents live below the poverty line.

Mending the Gap: Where can I get more information?

3. “1934: Federal Housing Administration Created.” Fair Housing Center of Greater Boston.


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