FHA Underwriting Manual explicitly lists race as mortgage risk factor

The Federal Housing Administration publishes a revised Underwriting Manual that explicitly encodes racial segregation into federal mortgage policy. The manual warns against the "infiltration of inharmonious racial groups" as a risk factor in evaluating neighborhoods for loan insurance and recommends requiring restrictive covenants that prohibit property occupancy by non-white residents. FHA staff circulate HOLC color-coded maps and use them to evaluate loan applications in cities across the country. The manual effectively transforms private housing segregation into a uniform national federal policy.