The Fair Housing Act and Disparate Impact

An explanation of the test for determining disparate impact liability under the Fair Housing Act, as interpreted by HUD and the courts. .

Written by Loran Jackson, Regulatory Compliance Counsel, NAFCU

Title VIII of the Civil Rights Act of 1968 — commonly referred to as the Fair Housing Act (the Act)  — was enacted to "provide, within constitutional limitations, for fair housing throughout the United States." The Act prohibits discrimination in all aspects of "residential real-estate related transactions," which includes activities like making loans to buy, build, repair or improve real estate; selling, brokering or appraising residential real estate and selling and renting real estate. It prohibits discrimination based on any prohibited basis, which include race, national origin, sex, religion, familial status and disability. The Department of Housing and Urban Development (HUD) is tasked with creating regulations to implement the Act. HUD's anti-discrimination regulations are located at 24 CFR 100.1 – 100.600.