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Fair Housing Act

Fair Housing Act

Equal Opportunity Housing refers to the idea that all persons should be granted “equal opportunities” when it comes to renting or purchasing real property. This is usually in reference to anti-discrimination policies and laws set forth by state and federal governments.  The term is often used in connection with the phrase “Fair Housing”.

Landlords are allowed to deny housing on the basis of legitimate business reasons. A few examples of this include credit history, income, references from past landlords, and past behavior, such as damaging property. Housing discrimination refers to a person being denied housing due to their membership to a protected class, and not for any legitimate business reasons.

Protected classes include:

  • Race;
  • National origin;
  • Color;
  • Religion;
  • Sex;
  • Age;
  • Disability, whether physical or mental; and
  • Pregnancy.

When Does It Apply?

The Fair Housing Act applies in certain circumstances, including:

  • Selling or renting real estate;
  • Advertising rentals or homes for sale and encouraging or discouraging specific individuals from living in a certain neighborhood, which is known as steering;
  • Providing financial assistance for renters or buyers of real estate;
  • Brokering or appraising real estate;
  • Participating in real estate organizations;
  • Intimidating, coercing or threatening individuals with regard to their purchase, rental, or real property; and
  • Interfering with an individual's right of enjoyment and use of housing rights based on a discriminatory reason.

Fair Housing Objective

The objective of fair housing is to ensure there are no discriminatory practices in real estate, whether an individual is buying or renting. When the Fair Housing Act was passed in 1968, its main objective was to prohibit race discrimination in the rental or sale of housing.

Prohibiting discrimination includes prohibiting the dissemination of false information regarding the availability of housing. This may include inaccurately providing information that no housing is available or steering individuals who are seeking to purchase into certain neighborhoods based on their race.

This has since evolved into an attempt to eliminate discrimination based upon:

Housing Discrimination

There are state and federal laws in place that make it illegal to deny someone housing based solely on the above mentioned characteristics. Biased treatment is unlawful during housing related activities, such as renting, buying, and lending. Additionally, it is prohibited to select tenants based on their familial status, such as having children, or their marital status.

Examples of housing discrimination could include:

  • A landlord requiring that an interracial couple utilize application criteria that is more burdensome than that required of other applicants;
  • A bank refuses to provide loan information to a person based on their protected class;
  • A real estate broker acting on behalf of a contractor publishes the availability of a newly built housing complex as being for white tenants only. In such cases, both the broker and the contractor would be engaging in discriminatory behavior;
  • A landlord advertising an apartment for sale and confirms with an inquiring couple, on the phone, that the unit is available. However, when the couple arrives to the unit thirty minutes later, and the landlord sees that the couple is interracial, they are told that the unit has since been rented; and
  • A potential renter wearing clothing associated with a particular religion visits a leasing office in which it is clearly stated that there are units available, only to be told that the signage is incorrect.

Family Status Housing Discrimination

Housing discrimination occurs against families when a landlord refuses to rent property to persons because they have children.  This type of housing discrimination is prohibited by the federal government under the Fair Housing Act.  Many states and cities also prohibit landlords from discriminating against families with children.  This does not apply, however, to housing that is designed for the elderly and meets other requirements.

Recognizing Family Status Discrimination

Although it can be overt, discrimination against families is usually subtle, and can take many forms, including:

  • An adults only provision in the lease
  • Limiting the number of people that can stay in an apartment
  • Restricting the type or location of property that families with children can rent
  • Refusing to rent for safety reasons associated with children
  • Asking about pregnancy, who takes care of the children, or the ages of those who will be living in the property
  • Charging more in rent for children

Exceptions Under the Federal Housing Act

As part of the Civil Rights Act of 1968, The Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings. This extends to other housing related activities including the dissemination of false information about the availability of housing.

Examples of dissemination of false information include incorrectly stating that there are no units available, or suggesting that people who are looking to buy in one area instead buy in another based on their race. Upon its passing, its central objective was to prohibit race discrimination in the sales and renting of housing. However, it has since extended to cover all protected classes.

The FHA applies to the following circumstances:

  • Selling or renting real estate;
  • Advertising real estate;
  • Providing financial assistance for buyers or renters of real estate;
  • Brokering or appraising real estate;
  • Participating in real estate organizations;
  • Intimidating, coercing, or threatening others in regards to their purchase or rental; and
  • Interfering with a person's right of enjoyment and use of housing rights based on discriminatory reasons.

Additionally, the Fair Housing Act makes it illegal to:

  • Engage in mortgage lending discrimination;
  • Harass people based on their protected class;
  • Interfere with anyone exercising their FHA rights; and
  • Retaliate against someone who has filed a fair housing complaint, or assists in the investigation of a fair housing complaint.

There are four major exceptions to the Fair Housing Act:

  1. Single family homes, as long as:
    • The home is also rented or sold by the owner;
    • The owner does not own more than three homes at a time;
    • The advertising for the sale or rental was not discriminatory; and
    • The owner did not use a real estate or broker
  2. Rooms or units in a building with a maximum of four units, as long as the owner is living in one of those units;
  3. Rooms or units owned either directly or indirectly by a religious organization. This is true only if preference is only given on the basis of that membership, and membership in that religion is not restricted by race, color, or nationality; and
  4. Rooms or units owned by a private organization for non-commercial use, as long as preference is only given on the basis of membership to that organization and is not restricted by race, color, or nationality

COVID-19 Relief for FHA Loan

Yes, there may be relief available to individuals with a FHA loan during the COVID-19 pandemic. The FHA is extending its eviction and foreclosure moratoria for single family mortgages that are FHA insured.

This means that HUD is currently prohibiting a mortgage servicer from initiating or proceeding with a foreclosure related eviction action or a foreclosure during the moratoriums. This will likely continue to be extended as the pandemic continues, so it is important to check on the current status.

The FHA has extended the time period of homeowners to begin a few forbearance plans to September 30, 2021. This provides assistance to homeowners who are at risk of falling behind on their mortgage payments.

This forbearance can be requested by homeowners who have not previously been in COVID-19 forbearance. These homeowners can request to pause or reduce their mortgage payments for six months.

If a homeowner received a forbearance between July 1, 2020 and September 2020, the FHA is currently providing one three month extension for individuals who request and need extra time to recover financially.

In addition, the FHA is currently providing a new home retention option, which is called the COVID-19 Advance Loan Modification (COVID-19 ALM). This option offers significant payment relief to eligible homeowners.

The COVID-19 ALM is offered to a borrower who is currently 90 or more days delinquent or at the termination of the COVID-19 forbearance. This option is provided to homeowners whose 30 year rate and term mortgage modification will bring their mortgage to current and will reduce the principal and interest portion of their monthly mortgage payment by at least twenty five percent.

The mortgage servicer is required to review the individual's FHA servicing portfolio and offer the new COVID-19 ALM to a homeowner with a FHA-insured mortgage who has faced a COVID-19 related hardship. In order to accept the modification, the borrower is simply required to sign and return the mortgage modification documents to the mortgage servicer.

If the borrower does not accept the COVID-19 ALM for any reason, all loss mitigation options will still be available. A borrower who cannot make their modified mortgage payments even with the COVID-19 ALM or who has other questions should contact their mortgage servicer and see what other options may be available to them.

Unlawfully Denied of Housing

If you feel you have been discriminated against, it is important that you begin by filing a complaint with the Office of Fair Housing and Equal Opportunity (“FHEO”). The Office is part of the Department of Housing and Urban Development (“HUD”). Your complaint should include the facts that prove why you believe you were violated. The complaint will be reviewed by the HUD and may require a response on the part of the accused party before the FHEO conducts an investigation. Next, they will determine whether there is enough evidence to establish that a violation did indeed occur.

Complaints must be filed within one year of the last date of the alleged discrimination. Following an investigation, the FHEO will issue its findings as to whether there is a reasonable cause to find a violation has occurred. If the investigation does indeed find cause, the HUD or the Department of Justice will take legal action against the violator.

How Can An Attorney Help Me With My Housing Discrimination Issues?

It is essential to have the assistance of a real estate attorney for any issues you may have involving the Fair Housing Act. If you believe you were the victim of discrimination, your attorney can review your situation, assist you in filing a complaint or a lawsuit, and represent you in court. If you are an owner or a landlord and you are concerned about conforming to the provisions of the Fair Housing Act, an attorney can help. Your attorney can also provide advice regarding state and local housing discrimination laws, which can be just as complex.