5.2 Federal Fair Housing Law and Protected Classes

Federal Fair Housing Act: the seven protected classes

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968), as amended in 1974 and 1988, makes it illegal to discriminate in the sale, rental, financing, or advertising of housing based on a protected class. Memorize all seven:

1. Race
2. Color
3. Religion
4. National origin
5. Sex (includes, per HUD, sexual orientation and gender identity)
6. Familial status (households with children under 18; pregnant persons; those securing custody) — added 1988
7. Disability (handicap) — added 1988

A common trap: age, marital status, occupation, source of income, and sexual orientation are not listed by name in the federal statute (though many states add them). On a national question, do not pick a class that is not one of the seven unless the question asks about state law.

The 1866 Civil Rights Act overlay

The Civil Rights Act of 1866 bars all racial discrimination in real-property transactions, with no exemptions and no expiration. So even when an FHA exemption technically applies, race is never exempt. This is the reasoning behind exam answers that say an exemption 'does not apply because the discrimination was based on race.'

Prohibited practices (tested by example)

• Steering — directing buyers toward or away from neighborhoods based on a protected class ('You'd be more comfortable in a community with families like yours').
• Blockbusting (panic selling) — inducing owners to sell by suggesting protected-class people are moving in and values will drop.
• Redlining — a lender or insurer denying or pricing loans/insurance based on the racial or ethnic makeup of a neighborhood.
• Discriminatory advertising — stating a preference, limitation, or discrimination ('adults only,' 'ideal for Christian family,' 'no kids').

Disability: accommodations vs. modifications

The FHA treats disability with two distinct obligations. Confusing who pays is a frequent trap.

Assistance/service animals are not pets — no pet deposit or pet rent may be charged. New multifamily construction (4+ units, first occupancy after March 1991) must meet design and construction accessibility standards.

Exemptions and enforcement

Limited FHA exemptions exist, but they are narrow and never cover race (because of the 1866 Act) and never cover discriminatory advertising or broker-involved transactions.

• Single-family home sold/rented by an owner who owns 3 or fewer such homes, without a broker and without discriminatory advertising.
• 'Mrs. Murphy' exemption — owner-occupied dwelling of 4 or fewer units where the owner rents rooms without a broker or discriminatory ads.
• Housing for older persons — a properly qualified 55+ community may lawfully exclude children (an exception to familial status only).
• Religious organizations and private clubs may, in limited noncommercial circumstances, prefer their members.

Enforcement. HUD administers the FHA. An aggrieved person generally files a complaint with HUD within one year, or may file a civil action in federal court within two years. Penalties include injunctions, actual damages, and civil penalties that escalate for repeat offenders. The moment a broker is involved or an ad is placed, the owner-occupant exemptions evaporate.

How exam stems disguise discrimination

The national exam rarely uses the word 'discriminate.' Instead it describes behavior and asks whether it is lawful. Watch for:

• An agent who 'only shows the buyer homes in neighborhoods where they'll fit in' — steering.
• A flyer warning owners that 'the area is changing, sell now before prices fall' — blockbusting.
• A landlord who allows children but 'puts all families with kids on the ground floor for safety' — familial-status discrimination disguised as a safety policy.
• A lender who quotes a higher rate for one census tract regardless of the applicant's credit — redlining.

Disparate impact

A policy that is neutral on its face can still violate the FHA if it produces a discriminatory effect without a legitimate, necessary business justification. A blanket 'no criminal record' or minimum-income rule can disproportionately exclude a protected class. The exam expects you to know that intent is not required — a discriminatory result can be enough.

The Seven Federal Protected Classes

The federal Fair Housing Act (Title VIII, 1968, as amended) protects seven classes. Memorize them with ReNFFSCD or simply the list:

Many states and Vermont add further classes (such as age, marital status, and source of income). On the national exam, answer with the seven federal classes unless the question specifies a state. Note that familial status does not protect against bona fide senior (55+) housing, a recognized exemption.

Discriminatory Advertising and the Agent's Duty

The Act bars any statement or advertisement that indicates a preference or limitation based on a protected class, and intent does not matter, the wording alone can violate the law. 'Perfect for a young Christian couple,' 'no kids,' 'adult building,' or 'walking distance to St. Mary's parish' all signal prohibited preferences. Describe the property, not the desired occupant.

Agents must also refuse to participate in client discrimination. If a seller instructs the agent not to show the home to families with children, the agent must decline the instruction and may need to withdraw, following it is a violation by the agent personally.

Steering (directing buyers toward or away from areas based on protected class) and blockbusting (inducing panic selling by suggesting a protected group is moving in) are agent-initiated violations that draw the heaviest penalties. HUD enforces complaints, which must generally be filed within one year, and aggrieved parties may alternatively sue in federal court within two years.