The Home Owners’ Loan Corporation and the Development of the Residential Security Maps

The Great Depression led to dramatic changes in financial regulation and home financing. Policymakers opted for insurance programs—deposit guaranty and mutual mortgage insurance—as safe and stable ways to manage the critical financial sector. An analysis of data collected in support of the Residential Security Maps of the Home Owners’ Loan Corporation shows that the age, upkeep, and price of housing along with mortgage availability are robust predictors of mortgage risk in these maps while the presence of non-white and foreign-born residents represent more modest estimators of mortgage risk. The system of mortgage insurance established in this period sowed the seeds of center city economic deterioration.