Redlining is the grouping of racial minorities into neighborhoods with limited resources and flawed housing. The practice is discriminatory and negatively affects both the economic and social conditions in those communities. The custom also hinders business development in neighborhoods populated by ethnic minorities since it paralyzes the housing market in the affected areas and limits the inflow of investments. Historically, how does redlining affect mortgage applications for African Americans in modern-day America? The multiple ways in which African Americans are affected by redlining are systemic. As people of color seek homeownership, they face historical and contemporary roadblocks from banks and mortgage lenders as well as bias-hiring practices. Many hiring managers were not accepting African Americans for jobs, causing an economic crisis for African Americans (Quillian, 2017). Those fortunate enough to gain employment were not earning enough (Miller, 2020). Disparate earning, along with mortgage lenders —who are scamming African Americans out of their money— and redlining have been massive barriers for people of color. People of color go through this general systemic racism and prejudice during the mortgage process, and that needs to change.

As a result of prolonged unemployment caused by biased hiring managers, people of color cannot afford houses in their own neighborhoods or in predominantly white and wealthy neighborhoods. While this surge of unemployment started many years ago, it is still relevant now. An article mentions: “African-Americans are twice as likely as whites to be unemployed and they earn nearly 25 percent less when they are employed” (Quillian, 2017, p.1). Due to this, many African Americans cannot afford homes in predominantly white neighborhoods; surprisingly, they neither can afford to buy within their own communities. White people —who apply for mortgages and jobs— get many more callbacks for interviews and application reviews. In fact, according to an article “Since 1990 white applicants received, on average, 36% more callbacks than black applicants and 24% more callbacks than Latino applicants with identical résumés” (Quillian, 2017, p.1). Many people of color have not only realized this but taken it into their own hands. People of color are doing everything they can to “Whiten” their applications. This method has worked for many people, one article describes what an Asian American did and how it paid off. “One Asian applicant said she put her very ‘Chinese-sounding’ name on her resume in her freshman year, but only got noticed after subbing in her American nickname later: ‘Before I changed it, I didn’t really get any interviews, but after that I got interviews,’ she said” (Gerdeman, 2017, p.2). The effects of unemployment are still around today, and African Americans are most vulnerable to it.

Compounding the unemployment issue and the disparity in earnings, lenders are denying mortgages to African Americans: “[…] lenders deny mortgages for Black applicants at a rate 80% higher than that of White applicants, according to 2020 data from the Home Mortgage Disclosure Act” (Olick, 2020, p.1). Most African Americans are not able to afford mortgages, but the ones who can, are getting scammed. The mortgage lenders are making them pay for more than what the house was originally worth without telling them. “A recent analysis of nearly 7 million 30-year mortgages by University of California at Berkeley researchers found that Black and Latino applicants were charged a higher interest —an average of nearly 0.08%” (Brooks, 2019, par. 1). Lenders who are biased are impeding the already complex mortgage loan process for people of color.

Many African Americans living in poor neighborhoods cannot afford to leave them. They are in communities that are lacking in basic infrastructures, giving them a motive to leave; but with nowhere to go. They are simply not earning enough to become homeowners. The employment issue, heightened with the mortgage loans discrimination, results in not being able to access homes in more desirable neighborhoods. (cfr., Singletery, 2020, pg.2). Because these houses are not in neighborhoods that have everything they need, the prices are much lower. “The value of my home in Prince George’s County, Md., would be significantly higher if my husband and I weren’t Black —and if all our neighbors weren’t Black” (Singletery, 2020, par.4). The impact of unemployment combined with redlining segments of the black population to what amounts to ghettoized areas, fuel the problem.

Mortgage redlining is not limited to the United States, including in Europe. European countries that have the highest percentage of Africans and people of African descent, like France (8.43%), the United Kingdom (3.68%), and the Netherlands (2.93%), as well as European countries with lower percentages of a black population like Germany, Italy, and Belgium have severe cases of housing discrimination. Surprisingly, Estonia with a minuscule percentage of its population of African descent, less than 0.06%, is also implicated in redlining and employment discrimination.

As shown, the mortgage process is an extremely biased and prejudiced form of systemic racism. Mortgage lenders take advantage of people of color, influencing others to do so too. But this all started with the high unemployment rates caused by extensive discrimination in hiring practices from years ago. Hiring managers unfairly judged people of color which caused an economic crisis. The root of the problem dates back over a hundred years ago, yet the effects are still around today. The discriminatory practice of redlining also played a big role in the housing situation today, they grouped African Americans into houses that did not have access to basic needs, likewise with black populations globally. This process is one of the most prevalent examples of racism in the modern world.


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Brooks, K. J. (2019). Disparity in home lending costs minorities millions, researchers find. CBS News. November, 15.
Gerdeman, D. (2017). Minorities who “Whiten” Job Resumes Get More Interviews. HBSWK. May, 17. Miller, S. (2020). Black Workers Still Earn Less Than Their White Counterparts. June, 11.
Jobzey. (2020). Top 10 European Countries With Largest Black Population. February, 29.
Olick, D. (2020). A troubling tale of a Black man trying to refinance his mortgage. CNBC. August, 19.
Quillian, L., Pager, D., Midtbøen, A. H. and Hexel, O. (2017). Hiring Discrimination Against Black Americans Hasn’t Declined in 25 Years. HBR. October, 11.
Singletary, M. (2020). Being Black lowers the value of my home: The legacy of redlining. The Washington Post. October, 23.