April 20, 2015
April is Fair Housing Month, and the FHA/HUD official site has a variety of resources for borrowers who want to know more about Fair Housing Act laws, and how such laws pertain to both borrowers and lenders. The FHA and HUD are quite serious about equal access to housing, but what do FHA home loan rules say about Fair Housing rules and how are participating FHA lenders expected to comply with those rules?
HUD 4155.2 Chapter One, Section B has some important guidelines:
“HUD is responsible for enforcing the Fair Housing Act. The Fair Housing Act, contained in 42 U.S.C. 3605, prohibits discrimination in residential real estate-related transactions, such as
• making or purchasing loans or providing other financial assistance, and
• the terms and conditions for making available loans or other financial assistance.
Lenders are prohibited from discriminating on the basis of
• race
• color
• religion
• sex
• handicap/disability
• familial status (existence of children), or
• national origin.”
Chapter One also adds, “While not prohibited by the Fair Housing Act, discrimination on the basis of marital status, sexual orientation, age, source of income, and other factors is prohibited by other federal, state or local laws, which must be followed where applicable.”
These rules don’t stop there. It’s true that many of the requirements spelled out in HUD 4155.2 are also covered by a variety of state and federal law, the instructions to the lender here are further developed in a section titled, “Prohibited Practices in Making Loans” which says:
“When making loans or providing other financial assistance, a lender is prohibited from discriminating against individuals by
• failing or refusing to provide information regarding
− the availability of loans or other financial assistance
− the application requirements, procedures or standards for review and approval of loans or financial assistance, or
• providing information that is
− inaccurate, or
− different from that provided to others because of race, color, religion, sex, disability, familial status, or national origin.”
You’ll also find more specific requirements when it comes to the procedural aspects of a loan:
“It is unlawful for a lender to discriminate against an individual because of race, color, religion, sex, disability, familial status, or national origin by using different policies, practices, or procedures to
• evaluate or determine the creditworthiness of any person in connection with a loan or other financial assistance secured by residential real estate
• determine the type of loan or other financial assistance to be provided, or
• determine the loan amount, interest rate, duration or other terms for the loan or other financial assistance.”
As you can see, FHA loan rules are fairly comprehensive in the anti-discrimination guidelines. Any borrower who feels they have not gotten fair treatment in the home buying process should contact HUD directly to discuss the matter and see what course of action might be appropriate. Fair Housing laws apply to all–learn more by calling 1-800-669-9777, TDD 1-800-927-9275 or visit HUD.gov.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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