Despite decades of government reform, the American housing credit system continues to mirror long‐standing patterns of racial segregation and inequality. Consistent with this trend, the current housing crisis reveals an unusually high concentration of subprime mortgage activity and property foreclosures in non‐white residential settlements across the nation. Given the generally accepted premise of market neutrality, this case study of lending patterns in Sacramento, California, questions why US housing market exchanges continue to produce racially disparate outcomes and seeks to identify the ideological practices in which race is deployed, informs state and private economic action and shapes contemporary credit market practices.