The Home Owners’ Loan Corporation (HOLC) was created in June 1933 by the US Congress. The purpose was to refinance mortgages in default to prevent foreclosures. In 1935 Federal Home Loan Bank Board asked HOLC to look at 239 cities and create "residential security maps" to indicate the level of security for real-estate investments.
On the maps, the newest areas — those considered desirable for lending purposes — were outlined in blue and known as "Type A". These were typically affluent suburbs on the outskirts of cities. "Type B" neighborhoods were considered "Still Desirable", whereas older "Type C" neighborhoods were labeled "Declining" and outlined in yellow. "Type D" neighborhoods were outlined in red and were considered the most risky for mortgage support.