Racial Financial Institutions, Credit Discrimination, and African-American Homeownership in Philadelphia, 1880-60

Author: Charles L. Nier

Dissertation School: Temple University

Pages: 326

Publication Date: April 2011

Availability:
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Access Number: 10861

Abstract:

In the wake of Emancipation, African Americans viewed land and homeownership as an essential element of their "citizenship rights." However, efforts to achieve such ownership in the postbellum era were often stymied by credit discrimination as many Black were ensnared in a system of debt peonage. Despite such obstacles, African American achieved land ownership in surprising numbers in rural and urban areas in the South.

At the beginning of the 20th century, millions of African Americans began leaving the South for the North with continued aspirations of homeownership. As Blacks sought to fulfill the American Dream, many financial institutions refused to provide loans to them or provided loans with onerous terms and conditions. In response, a small group of African-American leaders, working in conjunction with a number of the Black churches in Philadelphia, built the largest network of race financial institutions in the United States to provide credit to Black homebuyers. The leaders recognized economic development through homeownership as an integral piece of the larger civil rights movement dedicated to challenging White supremacy. The race financial institutions successfully provided hundreds of mortgage loans to African Americans and were a key reason for the tripling of the Black homeownership rate in Philadelphia from 1910 to 1930.

During the Great Depression, the federal government revolutionized home financing with a series of programs that greatly expanded homeownership. However, the programs, such as those of the Federal Housing Administration, resulted in Blacks being subjected to redlining and denied access to credit. In response, Blacks were often forced to turn to alternative sources of high-cost credit to finance the purchase of homes. Nevertheless, as a new wave of African-American migrants arrived to Philadelphia during post-World War II era, Blacks fought to purchase homes and two major race financial institutions continued to provide mortgage loans to African Americans in Philadelphia. The resolve of Blacks to overcome credit discrimination to purchase homes through the creation of race financial institutions was a key part of the broader struggle for civil rights in the United States.

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