Home Owners' Loan Corporation

At the urging of President Franklin Roosevelt, the US Congress created the Home Owners' Loan Corporation in June of 1933 . "Implicit in the legislation which I am suggesting to you is a declaration of national policy," Roosevelt stated in his message to Congress. "This policy is that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guaranty of social and economic stability, and that to protect home owners from inequitable enforced liquidation, in a time of general distress, is a proper concern of the Government" [Bridewell].

HOLC offices were quickly set up across the country, and applications for assistance were accepted beginning in August 1933. HOLC offered federal bonds to lenders in exchange for mortgages already in default, providing new fifteen-year mortgages at five percent interest to homeowners who were, in turn, expected to repay their new debt to the federal government. HOLC made one million loans across the country between 1933 and 1936, the only years for which it was authorized to make new loans. Eight out of ten of these homeowners paid their HOLC mortgage and kept their homes; the other 20 percent lost their homes to foreclosure by HOLC.

HOLC made approximately 51,000 loans in Pennsylvania, 15,000 of which were made in Philadelphia and 6,000 in the Philadelphia suburbs. HOLC made a disproportionate number of loans to areas latter colored red on its residential security maps and to African Americans, Jews, and immigrants, at least in Philadelphia. Using local brokers, HOLC resold the 200,000 properties acquired when homeowners defaulted on their HOLC mortgages. Evidence from Detroit and Philadelphia indicate that HOLC practiced racial discrimination in selling off these homes, refusing to sell homes to African Americans in white neighborhoods [Hillier, Journal of Planning History].

Near the end of the three-year time period for which it was authorized to make new mortgages, HOLC began the ambitious City Survey program for its parent organization, the Federal Home Loan Bank Board (FHLBB). The survey resulted in detailed reports and color-coded maps (above) for 239 cities across the country. HOLC did not use the maps to decide where to make its loans, because it made most of its loans before starting the City Survey Program in late 1935. But HOLC did plan to use the survey data to inform its loan collection policies [Hillier, in review]. The surveys were also intended to serve the broader agenda of the FHLBB. FHLBB was responsible for shoring up the savings and loan industry, and surveying real estate conditions across the country was expected to support this work. This interest in neighborhood real estate conditions reflected growing concern within the Federal Housing Administration (FHA) and among realtors, appraisers, lenders, and academic researchers about the importance of racial composition and housing conditions to long-term real estate investments.

About HOLC maps

The Home Owners' Loan Corporation (HOLC) created residential security maps for 239 cities across the country between 1935 and 1940 as part of the City Survey Program conducted for the Federal Home Loan Bank Board (FHLBB). HOLC used "map consultants"—primarily local lenders, realtors, and appraisers—to survey and assess real estate conditions. Together with HOLC staff, they completed survey sheets for each graded area on the maps in addition to detailed reports of each city. Information about how HOLC and FHLBB used this information is limited, but archival records indicate that the maps were shared with only a limited number of people outside HOLC, primarily federal agencies (including the Federal Housing Administration), and that HOLC was very concerned that the maps not be released to people who would misinterpret and misuse them [Hillier, in review].

In Philadelphia, HOLC created three versions of a residential security map, in 1935, 1936, and 1937. The overall picture of real estate conditions in the city became harsher with each corresponding version, with the final 1937 version covering much of the city red and declaring it "hazardous." HOLC resurveyed 23 cities in 1939, but Philadelphia was not among them. Survey sheets corresponding to each graded area exist for the 1936 and 1937 versions of the Philadelphia maps.

see J.M. Brewer's map of Philadelphia>>