5.2 Federal Fair Housing Law and Protected Classes

The Statutory Framework

Federal fair housing law begins with the Civil Rights Act of 1866, which bars all racial discrimination in property transactions with no exceptions. The Fair Housing Act of 1968 (Title VIII of the Civil Rights Act) and its later amendments create the modern framework enforced by HUD (the Department of Housing and Urban Development). The 1988 amendments added familial status and disability and gave HUD real enforcement teeth.

The Seven Federal Protected Classes

The Fair Housing Act protects seven classes. A common memory aid is "R-R-N-S, C-F-D" or the phrase race, color, religion, national origin, sex, familial status, disability.

Note that age, marital status, and source of income are NOT federal protected classes — but many states and localities add them, so a state exam item may differ. Stick to the seven on national questions.

Prohibited Practices

• Steering — directing buyers toward or away from neighborhoods based on a protected class.
• Blockbusting (panic selling) — inducing owners to sell by claiming protected-class persons are moving in and values will fall.
• Redlining — a lender or insurer refusing or pricing services based on the racial or ethnic composition of an area.
• Refusing to deal, lying about availability, or imposing different terms based on a protected class.

Fair housing violations are judged by effect, not intent. A practice that disproportionately harms a protected class can violate the law even if no one meant to discriminate — the disparate-impact rule.

Disability: Accommodations vs. Modifications

Two terms are routinely confused on the exam:

• Reasonable accommodation — a change in rules, policies, or services (e.g., waiving a no-pets policy for a service animal, or assigning a reserved parking spot). The housing provider generally bears the cost.
• Reasonable modification — a physical change to the unit (e.g., installing a grab bar or wheelchair ramp). In private housing the tenant usually pays and may have to restore the unit on move-out.

Limited Exemptions

Narrow exemptions exist but never for race (1866 Act), and they are lost if a broker is used or discriminatory advertising appears. Key exemptions: an owner of an owner-occupied building with four or fewer units (the "Mrs. Murphy" exemption), and a single-family home sold by the owner without a broker (limited to one sale in 24 months). Also, 55-and-older housing may lawfully exclude children if at least 80% of units have a 55+ resident — this is an exception to familial-status protection, not to the other classes.

Enforcement and Penalties

A complaint must be filed with HUD generally within one year, or a civil lawsuit within two years. HUD investigates and may pursue administrative penalties; courts can impose fines (escalating for repeat violations), actual and punitive damages, and injunctive relief. Equal-opportunity advertising should display the fair housing logo and avoid words signaling a preference (e.g., "adults only," "perfect for a Christian family").

The Equal Credit Opportunity Act

Fair housing in lending is reinforced by the Equal Credit Opportunity Act (ECOA), which bars credit discrimination based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Note ECOA adds marital status, age, and public-assistance income — protections that go beyond the seven Fair Housing Act classes. Lenders must give applicants a written notice of action and, on denial, the specific reasons or how to obtain them.

Advertising Words That Signal Preference

Describing the property is fine; describing the ideal occupant is dangerous. "Spacious four-bedroom near the elementary school" is acceptable, but "perfect for a young couple," "no children," "adults preferred," "good Christian neighborhood," or "close to St. Mary's parish" all imply a protected-class preference and violate the Act. The safest practice is to advertise features, square footage, and amenities — never the demographics of who should live there.