Loan Modification

HUD: Proposed regulation a ?fundamental issue of fairness?

By Karen Lawson

The U.S. Department of Housing and Urban Development (HUD) is proposing  a regulation prohibiting lending discrimination based on sexual orientation and gender identity. Although HUD and Federal Housing Administration (FHA) guidelines currently forbid housing discrimination, sexual orientation and gender identity are not currently included in the list of classes protected from discrimination. In addition to including  lesbian, gay, bi-sexual and transgender (LGBT) persons in groups protected from housing discrimination, the proposed regulations specifies that FHA home loans and access to HUD assisted housing  cannot be denied based on actual or perceived LGBT status. In comments related to the proposal, HUD Secretary Shaun Donovan noted that the proposal addresses a “fundamental issue of fairness,” and will help ensure that all Americans have equal access to public housing programs.

FHA loans covered under proposed anti-discrimination regulation

The proposed regulation would apply to all HUD and FHA housing programs including rental and owner occupied properties subsidized or insured through HUD and FHA programs.  Owners and landlords of FHA insured and HUD assisted housing, whether rental or owner occupied, would be prohibited from asking about the sexual orientation or gender identity of applicants for housing under the new regulations.  Although more than 150 local governments already have laws preventing LGBT based housing and lending discrimination, the  HUD proposal would  help ensure uniform anti-discrimination rules related to HUD and FHA programs, and is expected to close loopholes in areas where anti-discrimination laws don’t include sexual orientation and gender identity.

HUD to study LGBT housing discrimination

In related news, HUD is planning to conduct a national study of LGBT housing discrimination. Although HUD currently conducts housing discrimination studies based on race and color, the LGBT housing study will be the first of its kind, although previous studies of a smaller scale have suggested that members of the LGBT community are treated differently when applying for a home loan or attempting to rent. HUD cites findings contained in a 2007 report by Michigan’s Fair Housing Centers indicating that approximately 30 percent of LGBT applicants were treated differently when attempting to rent or purchase a home. In July, HUD  added language including discrimination based  on sexual orientation and gender identity as sexual discrimination under the Fair Housing Act. This step, and the proposed regulation, should provide needed protection for the LGBT community against discriminatory lending and housing practices.

FHA loan programs offer variety of home loans

FHA guidelines are more flexible than conventional mortgage lending requirements, and HUD/FHA guidelines are clear in their enforcement of anti-discrimination laws. Contact FHA lenders to learn more about FHA low down payment requirements, lending guidelines, and specialized mortgage loan programs for rehabilitating your home.

Full post as published by FHA Mortgage Guide on January 20, 2011 (boomark / email).