Home Owner's Loan Corporation by EMILY STENGEL

Purpose of the HOLC

299291 — 2016-01-12 21:22:02 UTC

The HOLC (Home Owners Loan Corporation) was implemented in order to allow home owners to refinance their mortgage and avoid foreclosure. This was intended to help stabilize real estate.

Relief, Recovery, or Reform?

299291 — 2016-01-13 05:21:12 UTC

The HOLC was implemented as an act of reformation for America. It was not something that provided immediate relief, but benefitted home owners long term and helped reduce the risk of mass amounts of foreclosure, as was seen during the Great Depression.

Success of the HOLC

299291 — 2016-01-13 05:29:25 UTC

Despite shortcomings in the demographic which it benefitted, the HOLC was more successful than not. The steep increase in home ownership from 40% in the 1920's to 70% in the 1990's can be attributed to the HOLC, since it reduced the risk of foreclosure for home owners. The growth of sprawling suburbs in the years following the Depression was also a successful outcome of the HOLC.

Federal Funding of the HOLC

299291 — 2016-01-13 05:50:10 UTC

Since the HOLC provided long lasting relief for home owners and ultimately contributed to the stabilization of real estate, the HOLC was a responsible use of federal funding. It sought to directly help Americans who were at risk of foreclosure, and allowed many others to purchase homes which they previously were unable to. The money invested in the HOLC provided a long term and lasting impression on the economy for decades to come, and ultimately changed the way Americans lived by allowing a greater spectrum of people to purchase homes in the suburbs.

Criticism of the HOLC

299291 — 2016-01-13 07:07:13 UTC

Despite its eventual success, the HOLC faced great criticism for its limited demographic and race based criteria. Potential recipients of HOLC benefits were required to provide information on their race and immigration status. African Americans received only 1% of the benefits provided by the HOLC, and cities such as Detroit with high populations of African Americans were excluded outright.

HOLC Risk Factor Map

299291 — 2016-01-13 07:14:33 UTC

Maps, like the one below, were created by the HOLC to assess the risks of mortgages throughout America. The risks of a mortgage were determined by factors such as terrain and income levels. These maps allowed the HOLC to determine which households would be considered for refinancing.

The HOLC faced great criticism for basing much of their criteria on maps like this one, since a main factor when creating them was "the infiltration of a lower grade population." Neighborhoods heavily populated by Jewish People, African Americans and immigrants were considered to be high risk, contributing to the unequal distribution of HOLC benefits.