Equal Opportunity Housing: What You Need To Know

Everyone deserves to be treated fairly when it comes to their search for and financing of housing. While most of us would take this principle for granted today, it hasn’t always been so accepted. Over the years, there have been a number of laws aimed at securing and protecting the right to equal opportunity housing, among other rights.

In this article, we’ll go over what equal opportunity housing means and the responsibilities it creates for all parties in a real estate transaction before touching on some of the relevant legislation in this area. Then we’ll go over what you should do if you suspect discrimination. Finally, we'll show how you can identify organizations that support equal opportunity housing.

Equal opportunity housing (sometimes also referred to as “equal housing opportunity”) means that everyone has an equal right to be judged fairly in financing decisions related to housing. Under these laws, you also have a right to rent accommodations wherever you want, provided you can afford it.

As part of various pieces of legislation aimed at creating equal housing opportunity, home buyers cannot be discriminated against on the basis of any of the following protected characteristics:

• Race
• Creed
• Color
• National origin
• Sexual orientation
• Military status
• Age
• Gender
• Marital status
• Disability
• Religion
• Familial status
• Whether any part of their income comes from public assistance programs like Social Security or Supplemental Security Income
• Whether an applicant for a mortgage or rental assistance has exercised any of their rights under the Consumer Credit Protection Act of 1968 or similar state laws

Unfortunately, despite these factors being prohibited from use in housing and lending decisions, occasionally parties run afoul of these laws and regulations, intentionally or subconsciously.

The Department of Housing and Urban Development (HUD) regulates issues of discrimination in housing. The department has an Office of Fair Housing and Equal Opportunity (FHEO). There are also state and local agencies where consumers can file complaints and seek relief.

In 2021, HUD and the Federal Housing Finance Administration (FHFA) entered into a Memorandum of Understanding in which they pledged to work to enforce the Fair Housing Act, and to restate their commitment to fighting discrimination in the home buying process.

HUD is primarily responsible for enforcing Fair Housing laws. The FHFA oversees and regulates Fannie Mae and Freddie Mac, the government-sponsored enterprises responsible for ensuring housing market liquidity.

logo. HUD provides a logo that certified lenders can use to show that they are committed to equal housing opportunities. Look for a house icon with “=” in the middle, as shown here:

Rocket Mortgage^® has this in the footer of our website, but you may see it in other places, depending on how the entity you’re working with has its website set up. We are committed to equal opportunity housing for all.

Another spot where you can assess a real estate company's stance on equal housing opportunities is by looking for the words “equal housing lender” whether that be in a logo or disclaimer text in a commercial or advertisement.

Discrimination is also prohibited – in most cases – in the rental process. However, discrimination is exempted from the Act, and thus can occur without legal consequences, if:

• The unit is in an owner-occupied, single-family home with 4 units or less
• The house is being offered for sale by owner or for rent without the assistance of a real estate agent or broker
• Housing is based on religious or private membership

In certain circumstances, the prohibition against racial discrimination may apply even when an individual or entity is otherwise exempt from the act. For example, religions and private clubs can’t deny you housing on the basis of race, color or national origin. Consult an attorney to understand your rights.

When it comes to buying a home, there are plenty of opportunities for discrimination to creep into the process. Fair housing rights are for the protection of buyers by buyers, with responsibilities for the sellers, appraisers and real estate agents involved in a home transaction. Let’s run through some of these.

Rights Of The Home Buyer

As a home buyer, no one can discriminate – legally, at least – for or against you based on any of the above protected attributes. This means you can buy or rent a home anywhere they’re available.

From a lending perspective, you can only be judged based on objective characteristics of your finances to determine whether you qualify. These could include your credit score and history as well as the amount of income and assets you have available for qualification. Lenders aren’t supposed to judge you based on whether the income comes from public assistance.

Additionally, there may be some special laws that apply based on your individual situation. We’ll get into a few of these later on.

Responsibilities Of The Home Seller

As a home seller, you have to fairly entertain offers from everyone who might want to buy your home. You can’t make decisions based on any of the categories mentioned above for or against someone.

This doesn’t mean that you can’t have some criteria for those you sell your home to. Let’s go over the difference: If it’s based on a financial qualification characteristic, like being preapproved so that the transaction goes smoother, that’s okay. But what’s not okay?

Let’s say you’re selling your home and would prefer to sell to a single person without children, because your neighbor is older and sensitive to a lot of noise. Although your intentions might be noble in that you’re being mindful of your neighbor’s feelings, selling only to this one demographic is also not something you can legally do – because familial status is a protected characteristic.

Someone selling or refinancing their home has certain rights as well, like the right to a fair home valuation. That’s where appraisers come in.

Responsibilities Of The Appraiser

When you buy or refinance a home, a home valuation is given to determine what it’s worth. Because the home serves as collateral for the loan, lenders won’t loan you more than the home is worth. Appraisers are supposed to evaluate the condition of your home and give it a value in line with recent sales of similar homes in your area.

In practice, the way this works is that if you have a three-bedroom ranch, your home is compared with recent sales of other three-bedroom ranches in your area, typically within a mile of yours, depending on the population density in your area.

Although the problem isn’t likely widespread, incidents of bias do happen on occasion. We’ll go over what sellers can do about the potential discrimination later on.

Responsibilities Of The Real Estate Agent

As a real estate agent, you’re also bound by these rules of nondiscrimination. If a buyer wants to look within a certain area, you have to show them the properties that are available. If they decide to make an offer, you negotiate on their behalf.

You aren’t legally allowed to avoid showing people certain areas because you believe those in the neighborhood might not be welcoming of their sexual orientation, for example, nor are you allowed to serve only particular races.

While we’ve gone over the basics of what your rights are as a home buyer or seller, it’s important to note that rights are nothing without the force of law behind them. With that in mind, let’s run through several key pieces of civil rights legislation and how they impact homeownership.

Civil Rights Act Of 1866

The earliest known federal legislation in this area was the Civil Rights Act of 1866. Passed during the reconstruction period after the Civil War over a veto by President Andrew Johnson, it declared that all people born in the United States were U.S. citizens with all the rights of citizenship. Importantly, these rates included the ability to own property.

Title VI Of The Civil Rights Act Of 1964

Title VI of the Civil Rights Act of 1964 prohibited discrimination among entities that receive federal funding. This was important from a housing perspective because it established that – legally speaking – discrimination would no longer be tolerated, and would, in fact, be punishable for offending providers of public housing.

Fair Housing Act

The Fair Housing Act prohibits discrimination in housing on the basis of race, color, national origin, religion, sex, familial status or disability.

Among the actions that are prohibited on the basis of these characteristics is refusing to rent or sell housing, or refusing to negotiate. You also can’t set different terms and conditions for sale or rental, or provide separate facilities. Lenders can’t charge different interest rates or qualification standards, and sellers can’t have different sales prices on the basis of a protected class.

Equal Credit Opportunity Act

The Equal Credit Opportunity Act prohibits discrimination in credit and lending decisions on the basis of race, color, religion, sex, national origin, marital status, age or if you receive public assistance income.

Creditors can’t discourage you from applying based on these factors, or consider them in taking your application. If you’re applying jointly or live in a community property state, they can ask about your spouse. Otherwise, that’s restricted. They also can’t give you different terms based on a protected characteristic.

Lenders may ask you about many of the characteristics above, but only as part of compliance monitoring associated with anti-discrimination laws. You’re not required to answer.

Consumer Credit Protection Act Of 1968

Under the Consumer Credit Protection Act of 1968, lenders and creditors are required to disclose credit terms to consumers. Consumers are also protected from the actions of loan sharks, and garnishing wages is subject to restriction. This act is enforced jointly by the Consumer Financial Protection Bureau (CFPB) and the FTC. The National Commission on Consumer Finance was also established to regulate the industry.

Americans With Disabilities Act

Together with Section 504 of the Rehabilitation Act of 1973 and the Fair Housing Act, the Americans With Disabilities Act, enforced by the Civil Rights Division of the U.S. Department of Justice, applies to most private housing as well as public housing. It prohibits discrimination on the basis of disability.

Examples of items provided for under this act are the following:

• Any privately owned or publicly held multifamily complex having its first occupancy after March 13, 1991, has to meet design and construction standards for use by the disabled, including accessible routes into and out of first-floor units (or all units in a building with elevators).
• Such accessible units need a usable kitchen and bathroom. This includes reinforcements for grab bars in the bathroom.
• Accessible outlets, thermostats and switches are required.
• Housing providers are required to make reasonable accommodations for qualified assistance animals.

HUD has more information on disability-related housing rights.

Home Mortgage Disclosure Act

The Home Mortgage Disclosure Act, enforced by the CFPB, requires lenders to report certain data specific to the following:

• Home purchases
• Preapprovals to purchase
• Home improvement
• Home refinance applications

This takes into account the areas in which a lender is making loans. It also looks at various pieces of information covered by the protected classes we’ve been talking about throughout this article – with the goal of identifying potential lending discrimination, whether communities are being appropriately served and whether there are opportunities for investment in underserved communities.

Section 1031 Of Dodd-Frank Wall Street Reform Act

More commonly known as UDAAP, this law prohibits unfair, deceptive or abusive acts or practices that cause a client to be unable to understand a product or service, or that take advantage of them in some other way. This is enforced by the CFPB.

Compliance with this law in the mortgage business means that lenders have to have clear and present disclosures of any terms associated with offers. It’s also why you see both a base interest rate and an annual percentage rate (APR) printed next to each other in advertisements.

New York Human Rights Law

The federal government isn’t the only one on the books with laws regarding financial regulation. One of the most visible state laws is the Human Rights Law, passed by the state of New York in 1965. This codifies in state law many of the same rights protected under the Federal Housing Act that was later passed in 1968. It prohibits discrimination based on race, creed, color, national origin, sexual orientation, military status, age, sex, marital status, disability or familial status, domestic violence victim status, predisposed genetic characteristics, gender identity or expression, pregnancy-related condition, lawful source of income, prior arrest or conviction record and retaliation for opposing discriminatory practices that are unlawful.

Although protecting the same types of rights, this law and others like it give states enforcement authority over housing discrimination actions. Mortgage lenders and brokers also are licensed at the state level, which enables states to have a level of oversight.

If you think you’ve been discriminated against in a housing situation in New York, you can file a complaint with the New York Division of Human Rights. You might also want to contact Housing Opportunities Made Equal (HOME), a civil rights advocacy group that works to ensure equal housing opportunities.

Now that you know a little bit about your rights under various fair housing laws, let’s run through some of what you can do if you feel you are the victim of discrimination.

Try To Work It Out With The Offending Party

No company, home seller or landlord wants to get a negative reputation. There may also be instances in which they don’t realize what’s going on. The first step would be to try and work things out. If that doesn’t work, you can move to other avenues.

Be Aware Of The Risk Of Bad Appraisal

When it comes to appraisals, if you plan on challenging one, you’ll have to show that the appraiser used properties that weren’t comparable to yours or did something else that would materially call into question their opinion of the value of the home. Your real estate agent can help you find comps.

That said, there are still plenty of examples of discrimination in the appraisal process.

The appraisal has to be challenged through your lender, who will evaluate the appraisal and your supporting documentation regarding why you think it’s wrong. In the event there are concerns with the appraisal, another independent appraiser is sent out.

File A Complaint With The Agency That Has Oversight

Figure out which agencies or oversight boards have authority over the entity you’re having trouble with. That may be multiple agencies. For instance, Rocket Mortgage is regulated by the Federal Trade Commission, the Consumer Financial Protection Bureau and oversight boards in the states in which we do business, just to name a few.

Home sellers and landlords are subject to HUD rules unless specifically exempted, as noted above. If you believe that you’ve been discriminated against in the housing market, you can file a complaint with HUD. The agency will review your complaint and launch an investigation if needed.

Mortgage brokers are licensed at the state level, as are real estate agents. You can also write the companies they’re associated with. Many belong to professional organizations that have ethics boards as well.

Government authorities, in particular, may have authority to take action on your behalf in the event of discrimination. Don’t be afraid to contact those at the federal, state and local levels.

Air Your Complaints On Social Media

Social media can be a powerful tool for calling attention to discriminatory behavior. Many social networks can also help you find others who have also experienced discrimination at the hands of anyone involved in a real estate transaction, including but in no way limited to a property owner, real estate agent or lender.

Consult With An Attorney

If you think this situation rises to the level that you would consider filing suit, you might speak with an attorney. They’d be able to go over what legal avenues you might have available to you.

Take Notes

The more detailed you can be in your description of your experience, the more it will help the people who may actually be able to take action based on your complaint. It’ll give them the information they need to dig in and see what’s happening.

Equal opportunity housing laws and regulations are intended to make sure that everyone’s ability to buy or rent a place isn’t decided based on discriminatory factors including, but not limited to, race, gender, national origin and disability. If you think you’ve been discriminated against, you should file a complaint with HUD and your state’s attorney general.

Looking for an equal housing opportunity company you can trust? Complete an application with Rocket Mortgage and get started on the mortgage process today. You can also give us a call at (833) 326-6018.