Equal Opportunity Housing: What You Need To Know
Kevin Graham10-minute read
February 02, 2021
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.
Get approved to buy a home.
Rocket Mortgage® lets you get to house hunting sooner.
What Does Equal Opportunity Housing Mean?
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 or 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:
- National origin
- Sexual orientation
- Military status
- Marital status
- 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. In 2020, there were 13 enforcement actions by federal authorities involving fair housing violations.
To deal with issues of discrimination in housing, the regulator is the Department of Housing and Urban Development (HUD). 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.
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 Homebuyer
As a homebuyer, no one can discriminate for or against you on the basis of any of the above protected attributes. This means you have the ability to 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 was that apply based on your individual situation as well. 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 OK. What’s not OK?
Let’s say you’re selling your home and you would prefer to sell to a single person without children because your neighbor is older and hates people making a ruckus. Although your intentions might be noble in that you’re being mindful of your neighbor’s feelings, it’s also not something you can legally do because familial status is a protected characteristic.
Someone selling or refinancing their home has certain words 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 in order 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.
Laws Guaranteeing Equal Opportunities In Housing
While we’ve gone over the basics of what your rights are as a homebuyer 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 were receiving federal funding. This was important from a housing perspective because it meant that discriminatory behavior wasn’t abided and would be punished for offending providers of public housing.
Fair Housing Act
The Fair Housing Act prohibits discrimination in housing on the basis of the following:
- National origin
- Familial status
Among the things that are prohibited on the basis of these characteristics is refusing to rent or sell housing or refusal 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 the following:
- National origin
- Marital status
- Whether 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. They may ask you about many of the characteristics above only as part of compliance monitoring associated with antidiscrimination 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. 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 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 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 post 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 takes advantage of them in some other way.
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. These are just a couple of examples.
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 the following:
- National origin
- Sexual orientation
- Military status
- Marital status
- Familial status
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.
What Should You Do In Cases Of Housing Discrimination?
Now that you know little bit about your rights under various fair housing laws, let’s run through some of what you can do if you feel you may have been 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.
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.
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.
Try To Find Who Has Jurisdiction
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 the landlords are subject to the rules of HUD.
Mortgage brokers are licensed at the state level, as are real estate agents. You can also write the companies they are 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.
Retain An Attorney
If you think this rises to the level that you would consider filing suit, you might speak with an attorney. They would be able to go over what legal avenues you might have available to you.
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 meat they need to dig in and see what’s happening.
How To Identify Real Estate Companies That Support Equal Housing Opportunities
If you’re looking for lenders that support equal housing opportunities, here are a couple of ways to identify them.
Look For The Logo
HUD provides a logo that certified lenders can use to show that they are committed to equal housing opportunity. Look for a house icon with an = in the middle as shown here:
Rocket Mortgage® has this in the footer of our website, but you may see it 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.
Radio And TV
If you’re listening to radio ads, they’ll usually say something like “equal housing lender” at the end of the commercial. In a TV commercial, you may find the info in a logo or disclaimer text at the end of the commercial.
The Bottom Line
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. An act may be considered discriminatory even if it was unintentional.
A homebuyer has various rights that are protected by acts such as the Fair Housing Act and Equal Credit Opportunity Act among many others. Sellers also have a right to have their property fairly valued without regard to any protected statuses. If someone feels they’ve been discriminated against, they have options ranging from working through it with the other party to filing a complaint with government authorities.
When looking for lenders who support equal housing opportunity, the most common indicator is a logo in the header or footer of their website. Rocket Mortgage® is an equal housing lender.
If you’re ready to buy a home or refinance, you can apply online!
See What You Qualify For
A Gender Gap You May Have Never Heard About: The Women’s Housing Investment Disparity
Home Buying - 14-minute read
October 26, 2020
The women’s housing gap has large, long-term effects on financial growth and retirement. Learn more about what it is, why it may exist and how to combat it.
Your Ultimate Guide to Mortgages And Home Loans For People With Disabilities
Home Buying - 13-minute read
December 02, 2020
An ultimate guide to grants, mortgages, modification loans and home loans for people with disabilities including must-know tips, programs and rights to land your ideal home.