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 BUILDING BLOCKS STUDENT WORKSHEET

Understanding redlining

For many people, owning a home is an important part of building wealth. To buy a home, most people have to take out a loan called a mortgage.

Redlining is a practice that makes it harder for people living in a certain area to take out a mortgage because of residents’ race, color, national origin, or other personal characteristics. Although redlining hurts neighborhoods and has been illegal for decades, it still goes on today.

Instructions

 Read the “Understanding redlining” handout.

 Answer the “Redlining in practice,” “Protections against redlining,” and “Digging deeper” questions below.

 Answer the reflection question on your own.

Redlining in practice

1. How did redlining begin? What was its original purpose?

Redlining began in the 1930s to advocate for people to buy homes. It was a tactic used help the US economy recover from the Great Depression.

2. Review the map in the “Understanding redlining” handout. Would you be offered a high or low interest rate on your mortgage if you wanted to buy a home near a cemetery? Explain your answer. : I would be offered a higher rate because homes near the government often raised prices for houses in the D and C area.

SAVE & INVEST

Accounts

SAVINGS CHECKING

BUILDING BLOCKS STUDENT WORKSHEET Understanding redlining

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3. Are there more green or red areas on the map? Based on what you know about redlining, who do you think was most likely to live in the neighborhoods marked in red vs. green? : There are more red areas on the map than green. Blacks usually lived there, as well as white people with low-paying jobs.

4. How did redlining create barriers to homeownership for Black, immigrant, and other communities? : They created barriers by giving them higher interest rates, which made them more expensive and harder to buy.

Protections against redlining

1. List three signs of credit discrimination, according to the Fair Housing Act and the Equal Credit Opportunity Act.

1. Refusing to provide a mortgage due to race and ethnicity.

2. Refusing to offer credit because you need public assistance.

3. Considering if you have children or not to provide credit.

2. What can people do if they believe they are being discriminated against when trying to get a mortgage? : They are able to make a report at the federal agency.

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Digging deeper

The Wilson family and the Smith family had the same income 50 years ago.

At that time, the Wilson family bought a home in a green area on the map

in the handout. The Smith family wanted to buy a house in the red area but

were denied a loan and never bought a home. Think about what you’ve

learned about redlining. Which family do you think had a better chance of

building generational wealth in the last 50 years? Why? : The Wilson family had a better chance at building generational wealth because they are most likely white, and are able to get loans and buy any house that they desire.

Reflection question

How would you feel if you learned your community or neighborhood had

been redlined?: I would be very disappointed if I found out my community had been red-lined because that is a very racist action. I also wouldn’t be suprised because this is Texas and they’ll do anything at this point.

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Understanding redlining

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