New HUD Regs Ban LGBT Discrimination

On Feb. 3, HUD issued a final rule requiring equal access to housing in HUD programs without regard to sexual orientation, gender identity, or marital status. The final rule is published as “Equal Access to Housing in HUD Programs—Regardless of Sexual Orientation or Gender Identity,” and the rule will take effect on March 5, 2012.

The final rule requires owners and operators of HUD-assisted or -insured housing to make housing available without regard to the sexual orientation or gender identity of an applicant. HUD will institute this policy in its rental assistance and homeownership programs, which include the Federal Housing Administration (FHA) mortgage insurance programs, community development programs, and public and assisted housing programs.

“Proud that HUD has been a leader in” the fight against LGBT discrimination, HUD Secretary Donovan announced that this final rule would “ensure that HUD's core housing programs are open to all eligible persons, regardless of sexual orientation or gender identity… [and should] serve as models for equal housing opportunity.” According to HUD, approximately 20 states, the District of Columbia, and more than 150 municipalities and counties have laws specifically prohibiting housing discrimination against LGBT individuals.

Summary of Rule's Provisions

The following are the major points in HUD's implementation of its ban on lesbian, gay, bisexual, and transgender (LGBT) discrimination. You can find the final rule at http://portal.hud.gov/hudportal/documents/huddoc?id=5359-F-02EqAccessFinalRule.pdf.

Defines “family” broadly. As noted in the January 2011 proposed rule, the majority of HUD's rental housing and homeownership programs already interpret the term “family” broadly. The final rule clarifies that families who are otherwise eligible for HUD programs may not be excluded because one or more members of the family may be LGBT or perceived to be LGBT or have an LGBT relationship. As such, this rule prohibits owners and operators of HUD-assisted or -insured housing from asking about an applicant's or occupant's sexual orientation and gender identity for the purpose of determining eligibility or otherwise making housing available, and an FHA lender may not take such characteristics into consideration in determining the adequacy of a mortgagor's income.

Bans discrimination based on sexual orientation or gender identity. The rule requires owners and operators of HUD-assisted housing, or housing whose financing is insured by HUD, to make housing available without regard to the sexual orientation or gender identity of an applicant for, or occupant of, the dwelling, whether renter or owner-occupied. Also, HUD's rule clarifies that otherwise eligible families may not be excluded because one or more members of the family may be an LGBT individual, have an LGBT relationship, or be perceived to be such an individual or in such relationship. HUD will institute this policy in its rental assistance and homeownership programs, which include the Federal Housing Administration (FHA) mortgage insurance programs, community development programs, and public and assisted housing programs.

Includes mortgage lenders. The rule prohibits lenders from using sexual orientation or gender identity as a basis to determine a borrower's eligibility for FHA-insured mortgage financing. The FHA's current regulations provide that a mortgage lender's determination of the adequacy of a borrower's income “shall be made in a uniform manner without regard to” specified prohibited grounds. The rule will add actual or perceived sexual orientation and gender identity to the prohibited grounds to ensure FHA-approved lenders don't deny or otherwise alter the terms of mortgages on the basis of irrelevant criteria.

Prohibits asking about sexual orientation or gender identity. The new rule prohibits owners and operators of HUD-assisted housing or housing insured by HUD from asking about an applicant or occupant's sexual orientation and gender identity for the purpose of determining eligibility or otherwise making housing available. In response to comments on the proposed rule, HUD has clarified this final rule to state that this provision does not prohibit voluntary and anonymous reporting of sexual orientation or gender identity pursuant to state, local, or federal data collection requirements.

Update Tenant Selection Plans

If your assisted housing site resides in a state or municipality that does not prohibit housing discrimination against LGBT individuals, you should update your tenant selection plan to include verbiage pertaining to gender identity.

“The absolute best advice I can offer to owners, agents, and managers is to not treat anyone differently for any reason, especially someone in a protected class. There are some owners that reject applicants based on tattoos, but that is not a protected class,” says Mark Chrzanowski, compliance specialist at Gene B. Glick Management Co. His company updated its tenant selection policy last year in response to a state law in Michigan. Now that HUD has endorsed a ban on LGBT discrimination at the federal level, he recommends that all sites update their policies to include a ban on LGBT discrimination.

Consider using the following language when updating your tenant selection plan:

Model Language

Management will not discriminate on the basis of race, color, creed, national origin, religion, sex, disability, familial status, sexual orientation, gender identity, or age (except as an eligibility requirement), in any phase of the occupancy process.

Insider Source

Mark Chrzanowski: Compliance Support Administrator, Gene B. Glick Management Co., 8425 Woodfield Crossing Blvd., Ste. 300W, Indianapolis, IN 46240; www.glickco.com.