Frederick Babcock and Homer Hoyt are credited with establishing the first Underwriting Manual for FHA. The Manual promoted racial segregation touting the use of racially restrictive covenants to guarantee the most “favorable condition” for neighborhoods. The Manual stated that deed restrictions should include a “prohibition of the occupancy of properties except by the race for which they are intended,” and that “inharmonious racial groups” and “incompatible racial elements” would cause the devaluation of a neighborhood.