CFPB Guidance on Avoiding Public Housing Assistance Discrimination

CFPBThe Consumer Financial Protection Bureau (CFPB) issued a bulletin to help mortgage lenders avoid illegal discrimination against applicants whose income includes vouchers from the Section 8 Housing Choice Voucher (HCV) Homeownership Program.

The Section 8 HVC Homeownership Program assists low-income, first-time homebuyers in purchasing homes and provides eligible participants with monthly housing assistances payment to help offset homeownership expenses. Under the ECOA, financial institutions may neither exclude nor refuse to consider income derived from this program during the loan application and underwriting process, nor only permit the vouchers to be used for certain mortgage loan products or delivery channels.

The CFPB’s bulletin offers guidance for lenders in managing their fair lending risk, including the importance of clear underwriting policies, providing training for underwriters and loan originators and ensuring careful monitoring for compliance with underwriting policies. CFPB Bulletin 2015-02, issued May 11, 2015, can be found here.

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