Fair Housing Act

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 What is the Fair Housing Act?

Title VII of the Civil Rights Act of 1968 is also known as the Fair Housing Act. The Act was enacted by Congress on April 11, 1968.

The Fair Housing Act prohibits discrimination during the sale, financing, or rental of dwellings as well as in other housing related activities on the basis of:

  • Race;
  • Sex;
  • Disability;
  • Color;
  • Religion;
  • Familial status; or
  • National origin.

What is the Objective of Fair Housing?

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:

  • Disability;
  • Religion; and
  • Familial status.

What is Housing Discrimination?

A landlord is permitted to deny an individual or individuals housing on the basis of a legitimate business reason. These reasons may include:

  • Income;
  • Credit history;
  • References from past landlords; and
  • Past behaviors, such as causing property damage.

Housing discrimination occurs when an individual is denied housing due to their being a member of a protected class and not for a legitimate business reason. Protected class characteristics include:

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

When Does the Fair Housing Act 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.

What Can I Do if Someone Has Committed a Fair Housing Violation Against Me?

Individuals who believe they have been the victim of an illegal housing practice may file a complaint with the Department of Housing and Urban Development (HUD) or they may be able to file a civil lawsuit in a state court or a federal court.

Any individual can file a complaint with HUD at no cost to them. Claims may be filed by mail, telephone, or online. After HUD receives the initial claim information, an intake specialist will contact the individual who filed the complaint in order to conduct an interview.

HUD may subsequently require the alleged fair housing violator to submit an answer to the formal complaint. HUD will then investigate the complaint.

Following the investigation, HUD will either determine that they have found enough evidence of a fair housing violation or it will make a no cause determination. If a no cause determination is made, the complainant may contest by filing a lawsuit.

Are There Any Exceptions to the Fair Housing Act?

Yes, there are several important exceptions to the Fair Housing Act, including:

  • Single family homes, so long as:
    • the home is also sold or rented by the owner;
    • the owner does not own more than three of this type of home at one time;
    • the advertising for the rental or property for sale was not discriminatory; and
    • the owner did not use a broker or a real estate agent;
  • Rooms or units in a building with a maximum or four units, so long as the owner lives in of the units;
  • Rooms or units directly or indirectly owned by a religious organization, so long as preference is only given on the basis of that membership and membership in that religion is not restricted by:
    • race;
    • color; or
    • Nationality; and
  • Rooms or units owned by a private organization for non-commercial use, so long as preference is only given on the basis of membership and membership in that organization is not restricted by:
    • race;
    • color; or
    • nationality.

Is There Any COVID-19 Relief for Those with a 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.

Should I Seek Advice from An Attorney?

Yes, 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.

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