Redlining is a discriminatory practice that systematically denies services such as mortgages, insurance loans, and other financial services to residents of certain areas based on their race or ethnicity. The term "redlining" originated from the practice of drawing a red line on a map around neighborhoods where lenders would not invest based on demographics alone. Redlining disregards individual qualifications and creditworthiness to refuse such services, solely based on the residency of those individuals in minority neighborhoods, which were also quite often deemed "hazardous" or "dangerous".
The practice of redlining had its origins in sales practices of the National Association of Real Estate Boards and theories about race and property values codified by economists surrounding Richard T. Ely and his Institute for Research in Land Economics and Public Utilities, founded at the University of Wisconsin in 1920. The Federal Housing Administration (FHA), established in 1934, furthered the segregation efforts by refusing to insure mortgages in and near African-American neighborhoods, a policy known as "redlining". Investigations found that lenders would make loans to lower-income white borrowers but not to middle- or upper-income African Americans.
Redlining is illegal, and mortgage applicants and homebuyers who believe that they might have been discriminated against can take their concerns to a fair housing center, the Office of Fair Housing and Equal Opportunity at the U.S. Department of Housing and Urban Development, or in the case of mortgages and other home loans, the Consumer Financial Protection.
