John Smith’s map of Virginia, engraved by William Hole and published in 1612. Public domain.
The Home Owners’ Loan Corporation took over troubled home mortgages and rewrote them as longer loans a household could pay month by month, and it mapped neighborhoods by risk.
A stretched household already behind could be refinanced if the house qualified, and could still lose the house if it did not.
A household in a neighborhood graded as sound could escape a payment that came due all at once and replace it with a loan that paid down a little every month.
A lender received a government bond instead of a frozen mortgage, and a household in a neighborhood graded as hazardous, very often a Black neighborhood, was marked as a poor credit risk.
Congress created the corporation in 1933 to stop a wave of foreclosures on homes, not on farms.
The longer loan was a real rescue for the borrowers it accepted.
The maps graded whole streets, and Black areas were classed as hazardous, in the same years federal housing credit was teaching lenders which blocks counted as safe.
Home Owners' Loan Act of 1933; Kenneth T. Jackson, Crabgrass Frontier (1985)