Redlining Lab

New-deal mortgage programmes benefited white borrowers disproportionately

Thomas, K., Storrs, T., Xu, W., Faber, J.

Nature, 2026

We show that the Federal Housing Administration (FHA) and Veterans' Administration (VA) mortgage programmes had few Black borrowers and proportionate foreign-born borrowers in their early years. Although scholars have long posited that the beneficiaries of these programmes were disproportionately white, evidence of the identities of these early borrowers was scant and lacking information on their nativity.

Here we fill this void by linking records from the Reconstruction Finance Corporation Mortgage Company (RFCMC), consisting of 29,921 FHA-insured and VA-guaranteed loans from 1935 to 1947, to Census data.

Although the population of the USA was 9.9% Black in 1940, we find that only 2.1% of FHA-insured loans and 5.1% of VA-guaranteed loans went to Black borrowers. We also show that immigrants were proportionally represented in FHA lending (10.0% of loans) relative to their share of the population and in VA lending (2.2% of loans) relative to their share of Second World War veterans.

Our results indicate substantial racial inequality in the two foundational homeownership policies in the USA. We anticipate our findings to be a starting point for nascent scholarship exploring the roles of FHA and VA lending in shaping racial disparities in access to homeownership and related outcomes, such as neighbourhood attainment and wealth.

Revisiting the Measurement of Redlining: Comparative Evidence from FHA and HOLC Maps

Xu, W., Thomas, K., Storrs, T., Faber, J.

In preparation, 2026