If you’ve ever submitted an offer on a home or applied for a mortgage and felt you were treated unfairly, you aren’t alone. Housing discrimination has existed for decades and continues to be a major issue, although it often appears in subtle forms. Fair housing laws helped address many blatantly discriminatory practices, but you may be wondering what rights you have under fair housing laws and who enforces them.
The Fair Housing Act (FHA) provides rights, responsibilities, and resources for everyone at every stage of the housing process, including buyers, renters, real estate agents, lenders, and brokerages. Fair housing is critical to creating an equitable society free from discrimination.
Whether you’re a homebuyer, renter, or just want to learn more, this article is for you. Read on to learn what you need to know about fair housing, including what it is, the rights it provides, the responsibilities it enforces, and what to do if you’ve been discriminated against.
What is fair housing?
Fair housing laws prohibit discrimination in the purchase, sale, rental, and financing of housing due to a person’s race, color, religion, sex, national origin, familial status, and disability. The Fair Housing Act protects everyone, including US citizens, green card holders, and undocumented residents.
The right to fair housing was established by the Fair Housing Act (Title VIII of the Civil Rights Act) in 1968 and has since been through dozens of amendments and executive orders expanding its reach. States, counties, and cities also often have specific housing laws that provide additional protections beyond those offered by the Fair Housing Act, such as prohibiting discrimination based on characteristics such as age, gender identity, honorably discharged veteran or military status, or source of income (including the receipt of income from affordable housing programs).
Exceptions to the Fair Housing Act
The Fair Housing Act applies to most housing, but there are a few exceptions where the law doesn’t apply:
- A dwelling with four or fewer units, if the owner lives in one of the units
- Single-family housing sold or rented without a broker, if the private owner doesn’t own more than three single-family homes at once
- Religious organizations and private clubs, as long as they don’t discriminate in membership
- Specific HUD-approved housing for older persons
Be cautious when applying for or purchasing housing that is exempt from the Fair Housing Act, and take your state and local laws into account as well, as they may offer additional protections beyond the federal law.
Fair lending and mortgage discrimination
Fair housing also applies to mortgage lending. The Equal Credit Opportunity Act (part of the FHA) prohibits lenders from discriminating against borrowers based on a legally protected characteristic at any stage of the mortgage process, including but not limited to:
- Refusing to make a mortgage loan or provide other financial assistance for a dwelling
- Refusing to provide information regarding loans
- Imposing different terms or conditions on a loan, such as different interest rates, points, or fees
- Discriminating in appraising a dwelling
- Conditioning the availability of a loan on a person’s response to harassment
- Refusing to purchase a loan
An example of mortgage discrimination is redlining, which is the process of denying mortgages, insurance, and other services to residents in specific areas.
Fair housing rights and responsibilities
The Fair Housing Act provides protections for homebuyers and renters and responsibilities for home sellers, renters, and mortgage lenders. Let’s take a closer look.
Rights of the homebuyer
As a homebuyer, you’re protected from discrimination based on any legally protected characteristic in any part of the homebuying process. This includes financing, finding a real estate agent, touring homes, submitting offers, negotiating, and more.
Rights of the renter
The Fair Housing Act protects both buyers and renters. Here are a few important tenant rights (this is not an exhaustive list):
- Right to a fair security deposit refund
- Right to a notice of eviction and a timeframe in which to fix the situation
- Right to a habitable home
- Right to privacy
- Right to quiet enjoyment
Homebuyers and renters can file discrimination complaints with HUD or file lawsuits in state or federal court. Retaliation against someone who filed a complaint is prohibited by law.
Responsibilities of the home seller and landlord
Home sellers and landlords have to fairly entertain offers from everyone who might want to buy or rent your home. A seller and landlord cannot take any of the following actions because of a person’s race, religion, or other legally protected characteristics (this is not an exhaustive list):
- Refuse to rent or sell housing
- Refuse to negotiate for housing
- Make housing unavailable
- Otherwise deny someone a home
- Set different terms, conditions, or privileges for the sale or rental of a home
- Provide different housing services or facilities
- Falsely deny that housing is available for inspection, sale, or rental
- Blockbusting, i.e., for profit, persuading or trying to convince homeowners to sell their homes by suggesting that people of a particular race or other protected characteristic have moved or are about to move into the neighborhood
- Deny someone access to, membership, or participation in any organization, facility, or service related to home sales and rentals (such as a multiple listing service), or discriminate against any person in the terms or conditions of access, membership, or participation
Responsibilities of the lender
Fair lending guarantees the same lending opportunities to everyone, though lenders can legally make distinctions based on non-protected characteristics, such as credit scores. Lenders cannot discriminate against anybody based on race, national origin, or other legally protected characteristics. Some examples of discriminatory practices include (this is not an exhaustive list):
- Unnecessary closing costs
- Inflated broker or lender fees
- Unnecessary recording fees
- Excessive prepayment penalties
- Refusing to consider a mortgage applicant’s disability-related income, such as SSI or SSDI
- Refusing to provide mortgages to a person on parental leave
- Changing mortgage loan terms at closing without the borrower’s consent
If you’re dealing with a mortgage broker or lender, take notes during and after the process. Also, ensure you receive these items at no cost:
- Good Faith Estimate
- Truth in Lending Disclosure Statement
- Copy of your loan application
- Mortgage Servicing Disclosure Statement
Receiving a home loan can be a significant barrier to entry to homeownership and has historically been a discriminatory process. If you believe you have experienced lending discrimination, visit HUD’s housing discrimination complaint website to file a complaint.
Responsibilities of the appraiser
A home appraiser determines the value of a home so it can serve as collateral for a loan. Home appraisals are an essential part of the homebuying process.
Appraisers must fairly value every home they appraise and cannot charge excessive appraisal costs. Lowballing – making an excessively low appraisal based on the homeowners’ race or other protected characteristics – is prohibited.
Responsibilities of the real estate agent
Real estate agents are bound by all fair housing laws and regulations. Many agents are also members of the National Association of REALTORS®, which provides an additional code of ethics.
Redfin employs real estate agents and brokers, most of whom are REALTORS®. In addition to any FHA training all agents and brokers must complete as part of their licensing requirements, and the Code of Ethics REALTORS® must abide by, Redfin requires agents and brokers to complete an additional comprehensive FHA training. This training explains the FHA and the risks of non-compliance, Redfin’s Fair Housing Policy, and restates our commitment to honoring every customer.
Examples of housing discrimination
While landlords and banks don’t often display ads saying “Whites only” or enforce restrictive covenants, discrimination persists in more subtle ways. Housing discrimination still disproportionately affects people of color and other minoritized groups. For example, studies indicate that same-sex couples and transgender persons often experience less favorable treatment than their straight and cisgender counterparts.
Lending practices are another example. Outright discrimination is illegal, but racialized perceptions of value contributed to the devaluation of property and housing stock in neighborhoods of color.
All forms of housing discrimination are illegal and punishable by federal law, but subtle methods can be harder to prove.
Types of housing discrimination
Some common types of housing discrimination have names. While this list is not exhaustive, here are three common examples:
- Redlining: Redlining was a racist tactic used by banks, lenders, and other businesses to deny mortgages, insurance, and healthcare to people living in certain areas that were deemed to be “hazardous.” This was once legal and supported by the federal Homeowners Loan Corporation (HOLC) but was outlawed by the Fair Housing Act. However, historically redlined communities are often still lower income and inhabited by minoritized groups. Redlining has also become shorthand for many types of historic race-based exclusionary tactics.
- Steering: Steering in real estate is the illegal practice of guiding prospective homebuyers towards or away from certain areas based on a legally protected characteristic, such as race or gender. This can create homogeneous neighborhoods that often negatively impact immigrants, people of color, and LGBTQ+ folks while benefiting white, cisgendered homebuyers. Steering continues to be a form of discrimination.
- Lowballing: Lowballing is when a home appraiser makes an excessively low appraisal on the basis of race, religion, or other protected characteristics.
Who enforces fair housing?
The Department of Justice (DOJ) and HUD play a role in enforcing the FHA. HUD and its Fair Housing and Equal Opportunity (FHEO) office handle most enforcement and administration responsibilities. In contrast, the DOJ handles violations of the Fair Housing Act, which are punishable by law. Depending on the severity and frequency of the violations, the DOJ can institute criminal charges or take further legal action.
There are ten HUD regions in the US, each with an FHEO office. These offices manage fair housing complaints and administration in their specific region. Individual states, counties, and cities often have their own housing laws and enforcement agencies where people can file complaints and seek help. Nonprofit organizations can help as well and connect people with resources.
What about fair lending?
In 2021, HUD and the Federal Housing Finance Administration (FHFA) agreed to work together to enforce the Fair Housing Act and to restate their commitment to fighting discrimination in the homebuying process. This is important because FHFA regulates Fannie Mae and Freddie Mac, the two major government-sponsored mortgage lenders. By partnering with HUD, the FHFA can help ensure Fannie Mae, Freddie Mac, and other mortgage lenders practice fair lending.
Fair housing vs. equal housing opportunity
Fair housing, equal housing opportunity, and equal opportunity housing are different terms that all refer to the Fair Housing Act. The difference is in how they’re used. Fair housing generally refers to rules and regulations, while equal housing opportunity refers to real estate businesses that follow the rules.
Equal housing opportunity is a common phrase used throughout the real estate industry. It indicates that a business advertises they abide by the Fair Housing Act.
How to identify companies that support fair housing
Fair housing is the law; all brokerages, lenders, agents, landlords, or other housing providers must follow it. However, many people want to look for brokers or lenders that affirmatively show their commitment to fair housing. To find them, look for the Equal Housing Opportunity logo, statement, or slogan.
Additionally, all advertising of residential real estate for sale and rent, and financing opportunities, must abide by fair housing laws. It’s illegal to make, print, or publish any notice, statement, or advertisement that indicates a preference, limitation, or discrimination because of race, color, or other legally protected characteristics.
What to do if you experience housing discrimination
If you experience housing discrimination, your first step should be to file a complaint with HUD, your regional FHEO office, or your local housing authority. In cases where you may be evicted or otherwise lose your housing, HUD can assist you as soon as you file and expedite the judicial process. Retaliation against a complainant is illegal, so fight for your rights.
If you don’t feel comfortable filing a complaint or want to assess your legal rights, consider consulting an attorney. You can also call a government hotline, such as your city or state’s Human Rights Commission. This can get you more immediate help.
Generally, taking notes during any housing, renting, lending consultations, and other real estate-related services is a good idea. A first-hand account can be helpful if you experience discrimination and wish to file a complaint.
Final thoughts on fair housing: equal housing is a right
Fair housing is a fundamental right that ensures equal access to housing and equal homeownership opportunities. The Fair Housing Act and its additions, including the Equal Opportunity Credit Act and the Americans with Disabilities Act, provide legal protections and procedures that are enforceable by law. There are protections for more specific cases as well that this article didn’t cover.
The Fair Housing Act is over 50 years old and continues to help people in need. However, while the industry has changed, it is not free from discriminatory practices. Expanding legislation and providing additional resources will help everyone receive the right to housing without discrimination. It will take work, but it is necessary.
If you’re employed in the real estate industry, you can make a difference right now by taking the Fair Housing Pledge. This pledge signifies your commitment to staying informed about fair housing laws and anti-discrimination practices, and not tolerating discrimination and non-compliance.
Redfin is committed to providing fair and equitable service, including housing opportunities, free from any kind of unlawful discrimination. Employees, Licensees, and representatives of Redfin must abide by Redfin’s fair housing policy at all times, which means, at a minimum, complying with all federal, state, and local fair housing laws. We will continue to demonstrate our commitment to fair housing by continuing to work to close the housing and wealth gap in our communities and collaborate with nonprofits to provide affordable housing solutions when possible.
- To learn more about Redfin’s commitment to fair housing, click here and here
- To file a fair housing complaint, click here
- To learn about resources in your area, click here
This post first appeared on Redfin.com. To see the original, click here.