Contract Buying Scheme Strips Black Homebuyers of Wealth in Chicago

Beginning in the mid-1930s, as FHA redlining blocked Black buyers from conventional mortgages, Chicago speculators developed 'contract buying', selling homes to Black buyers at inflated prices under contracts that required full payment before title transferred, with no equity accruing. A single missed payment meant eviction with no refund of years of payments. Sellers including Lou Fushanis operated portfolios of hundreds of properties. Beryl Satter's research documented families paying $14,500 for homes worth $12,000 via contracts while comparable FHA mortgages would have cost $10,000. Contract buyers collectively paid an estimated $3.2 billion in excess wealth extraction in Chicago alone between 1950 and 1970.