Home Owners' Loan Corporation

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The Home Owners' Loan Corporation (HOLC) was a New Deal agency established in 1933 by the Home Owners' Loan Corporation Act under President Franklin D. Roosevelt.[2] Its purpose was to refinance home mortgages currently in default to prevent foreclosure. This was accomplished by selling bonds to lenders in exchange for the home mortgages.[3] It was used to extend loans from shorter loans to fully amortized, longer term loans (typically 20-25 years). Through its work it granted long term mortgages to over a million people facing the loss of their homes.

The HOLC stopped lending circa 1935, once all the available capital had been spent. HOLC was only applicable to nonfarm homes, worth less than $20,000. HOLC also assisted mortgage lenders by refinancing problematic loans and increasing the institutions liquidity. When the HOLC ended its operations and liquidated assets in 1951, HOLC turned a small profit.[4][5]

HOLC is oft-cited as the originator of mortgage redlining, although, this claim has also been disputed. The racist attitudes and language found in the appraisal sheets and Residential Security Maps created by the HOLC likely gave federal support to existing private sector bias and racial antipathy (Crossney and Bartelt 2005; Crossney and Bartelt 2006).

See also


  • Annual reports of the Home Owners' Loan Corporation from 1933 through 1952 are included reports of the Federal Home Loan Bank Board. They are available in searchable pdfs on the Federal Reserve Bank of St. Louis' FRASER website. [1].

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