The Federal Housing Administration backed mortgages arranged through this program and bankers didn’t have to worry about foreclosures or defaults because if buyers fell behind on their payment, Washington would simply pay off the loan. An unprecedented number of black renters in Philadelphia, Detroit, Chicago and other urban centers became homeowners.

But the program was troubled from the start. The conditions that allowed for homeownership also set the groundwork for fraud. Racist exclusion gave way to predatory inclusion.

Speculators bought decrepit or even condemned houses on the cheap and then quickly flipped them. F.H.A. appraisers, often part-time real estate agents, would sometimes pocket bribes to inflate the value of the house.

Meanwhile, bankers signed off on bloated appraisals because Washington absorbed the risk. These bankers made money on both the fees to make the loan and the closing costs to sell the house, so they cared only about issuing a huge number of mortgages, which they’d package and resell. It didn’t matter to them whether a house went into foreclosure.