Alcohol Drugs and Society Practice Test

Federal housing policies shaped urban segregation by guiding who could buy homes and where they could borrow money. The FHA’s loan programs promoted homeownership in single-family, predominantly white suburban neighborhoods and enforced underwriting standards that made financing in older urban housing hard to obtain. Combined with redlining practices by lenders, this kept investment out of inner-city areas, leading to disinvestment and wealth disparities that helped form and sustain ghettos in urban centers. Other types of loans, like payday, car, or student loans, did not play the same systematic, policy-driven role in shaping neighborhood patterns over decades.