Final answer:
Redlining is the practice of denying or limiting financial services like loans to residents of certain neighborhoods based on racial demographics, which has historically affected minority communities' ability to own homes and accumulate wealth.
Step-by-step explanation:
The practice of designating certain neighborhoods as areas where loans will not be made is known as redlining. This discriminatory practice originated with the Federal Housing Administration (FHA), which refused to back loans in minority neighborhoods, marking such areas with red lines on maps to indicate areas considered too risky for investment. This had profound impacts on the ability of minorities to receive home loans, directly affecting property values, access to resources, and the accumulation of generational wealth. Even when minorities had sufficient income and credit history, they were still denied loans or charged higher rates, a practice known as reverse redlining, which further perpetuated economic disparities.