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.