The Home Owners’ Loan Corporation (HOLC) was a government-sponsored corporation created in 1933 as part of President Franklin D. Roosevelt’s New Deal. Its primary purpose was to refinance existing home mortgages that were in default or at risk of foreclosure during the Great Depression. The corporation provided low-interest loans with longer repayment terms to struggling homeowners, preventing widespread displacement and stabilizing the housing market.
The establishment of this entity provided significant relief to millions of American families facing economic hardship. By offering a lifeline to homeowners, it not only preserved homeownership but also injected vital capital into the crippled financial system. However, the HOLC is also associated with the controversial practice of “redlining,” where certain neighborhoods, often with large minority populations, were deemed too risky for investment, contributing to discriminatory housing practices and exacerbating racial segregation in urban areas.
