Even the most creditworthy black neighborhoods barely received FHA backing

Evidence

In 1940, the FHA insured 2 percent of black homeowners in Baltimore (representing twenty-five FHA-insured loans) compared with 8 percent of white homeowners. … Morgan Park was developed around 1916 by Morgan College, a historically black college now known as Morgan State University. From what I can tell, the neighborhood was developed for black people as a defensive measure—to provide decent and safe housing for black faculty and other black Americans connected to the college who were unable to live in other parts of Baltimore because of their race. One factor that likely gave these homeowners an advantage in the eyes of the FHA was that the development included a racially restrictive covenant (though not the typical one): Only black people could buy property in Morgan Park. Its residents were financially well off, and many were faculty at the college and so could easily satisfy FHA income requirements. Neighborhood lore described Morgan Park as a place “occupied by the upper crust of Black society in Baltimore, including famous residents such as W. E. B. Du Bois.” Most important, Morgan Park was geographically isolated in northeastern Baltimore and was surrounded on three sides by a small stream that separated it from nearby white neighborhoods, ensuring that it would remain all-black. Even the streets were deliberately built without any connection to the white neighborhood to its east, Lauraville. As a result of checking all the FHA’s boxes, in 1940, eleven out of twenty-six black homeowners received FHA support. — Dorothy A. Brown, Getting to Reparations, 368

Categorization

• XREF: The ‘perfect black neighborhood that still barely qualified’ fact supports the saturated-system harm argument in Whiteness of Wealth — even ideal black borrowers still saw disproportionate denial. This is ammunition for the reparations brief.