An activist group is accusing the FHA program of letting lenders make government-guaranteed mortgages in minority communities without regard for the creditworthiness of borrowers.

In a study being presented today to the housing and community opportunity subcommittee of the House Banking Committee, the Chicago Fair Housing Alliance found significantly higher default rates for FHA loans in minority census tracts than in white census tracts. For instance, minority neighborhoods made up all but four of the 118 Chicago-area census tracts with abnormally high default rates.

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