The Fair Housing Act (FHA)

Civil rights acts, including legislative reform that dictated the manner in which organizations conducted business, came about as a result of discriminatory practices that took many forms. To ensure equal treatment of Americans, legislation like the Fair Housing Act was created. Title VIII of the Civil Rights Act of 1968 (also known as the Fair Housing Act) prohibits discrimination in the sale, rental, and financing of dwellings based on race, color, religion, sex, or national origin. Title VIII was amended in 1988 (effective March 12, 1989) by the Fair Housing Amendment Act, which was designed to do the following:

  • Expand the coverage of the Fair Housing Act to prohibit discrimination based on disability or on familial status (presence of a child under the age of 18, and pregnant women);
  • Establish new administrative enforcement mechanisms with HUD attorneys bringing actions before administrative law judges on behalf of victims of housing discrimination;
  • Revised and expanded Justice Department jurisdiction to bring suit on behalf of victims in Federal District courts.

The Act makes it unlawful for any lender to discriminate in its housing-related activities against any person because of:

  • Race
  • Color
  • Religion
  • National origin
  • Sex
  • Familial status (the presence of children under the age of 18)
    • pregnancy
    • a family or individual in the process of adopting or having legal custody of a child under the age of 18
  • Disability
    • having a record of such impairment
    • persons diagnosed as being HIV-positive
    • recovering substance abusers

Congress amended the FHA in 1988 [Public Law 100-430] to:

  • Establish an administrative enforcement mechanism under the Department of Housing and Urban Development (HUD)
  • Allow for increased penalties for violations of the FHA
  • Include certain secondary mortgage market conduct
  • Add two new protected categories to the FHA, i.e., disability and familial status

Some government or state subsidized lending programs a can use familial status information in their credit decision. HUD issued comprehensive FHA regulations for the first time in 1989 (24 CFR Parts 100-121). The FHA and the implementing regulations are critically relevant to financial institutions involved in real estate-related transactions. HUD has primary enforcement authority for compliance with the FHA. The FHA charges the FDIC, as a federal regulatory agency of financial institutions, with the responsibility of ensuring in an affirmative manner that FDIC- supervised institutions comply with the FHA to further the goal of providing for fair housing throughout the United States (Section 808(d)). The FDIC’s Part 338, Fair Housing, is the implementing regulation for the FHA.