Study Offers First National Picture of Racial Inequities in Early Federal Home Lending

For decades, historians have documented discriminatory practices in the federal mortgage programs that helped create modern American homeownership. A new study involving a University of Virginia researcher is the first to measure the scope of those disparities nationwide.

Published in Nature, the study found that from 1935 to 1947, Black Americans received just 2% of Federal Housing Administration loans and 5% of Veterans Administration home loans, despite making up about 10% of both the U.S. population and the nation's veterans during that period.

The findings offer the clearest national evidence to date that the two federal programs that dramatically expanded homeownership after the Great Depression largely excluded Black families from opportunities to build wealth through homeownership.

The research team included Thomas Storrs, a UVA doctoral student in history, along with collaborators from New York University and the University of California, Santa Barbara.

"Our research shows that European immigrants benefited from the FHA and VA programs at rates similar to native-born White Americans," Storrs said. "In contrast to the Black-White divide, we did not find differential outcomes correlated with nativity in federal programs around WWII."

Unlike previous research, which focused on individual cities or isolated examples of discrimination, the new study examined lending across 38 states. The researchers digitized more than 100,000 FHA and VA mortgage records and matched them with U.S. Census data, creating the first national dataset of its kind. They also analyzed individual VA loan records that had not previously been available to researchers.

The study found that foreign-born borrowers received FHA and VA loans at rates that closely matched their share of the U.S. population and veteran population, underscoring that the most significant disparities in the programs fell along racial rather than nativity lines.

UVA historian and award-winning author Andrew Kahrl, whose own research has traced how discriminatory tax policies stripped Black Americans of property and wealth across the 20th century, said the new study's national scope fills a critical gap in that broader story. "Thomas is producing pathbreaking research that sheds new light on the roots of one of the most critical issues facing America today," Kahrl said. "To have his work published in one of the top scientific journals is a testament to the significance of this work and to the added impact that historians can make through collaboration across the disciplines. I could not be more impressed with and happy for him."

The research was supported by the Russell Sage Foundation and the Washington Center for Equitable Growth.