Which statement best describes the legality of redlining and blockbusting under the FHA?

• A. They Are Illegal Discriminatory Practices
• B. They Are Legal In Certain Contexts
• C. They Are Encouraged By Lenders
• D. They Have No Impact On Housing

Answer: (A)

The main idea is that housing laws protect people from discrimination in any lending, sale, or lease of a property. Redlining and blockbusting are classic discriminatory tactics that target people based on protected characteristics, especially race or ethnicity, to influence who can get loans or buy homes. Redlining involves a lender or insurer refusing or limiting services in a particular area because of the area's demographics. Blockbusting involves scaring current residents into selling at low prices by suggesting that people from a protected class are moving in, then profiting from the sales. Under the Fair Housing Act and the FHA, these practices are illegal because they deny people equal access to housing and rely on bias rather than merit or market factors. They are not legal in any context, they are not encouraged by lenders, and they contribute to ongoing housing inequality.