How HUD Regulates Real Estate

Instructor: Shawn Grimsley
Federal law prohibits housing discrimination and supports affordable housing. In this lesson, you'll learn the role the U.S. Department of Housing and Urban Development plays in preventing discrimination and ensuring affordable housing.

HUD - An Overview

One of most basic necessities you need in life is shelter. Two obstacles many people face to finding shelter is affordability and discrimination. One of the agencies charged with helping you overcome these barriers to proper housing is the U.S. Department of Housing and Urban Development (HUD), which was created by Congress in 1965. According to HUD, its mission 'is to create strong, sustainable, inclusive communities and quality affordable homes for all.' Let's see how HUD seeks to accomplish its mission.

Fair Housing Acts

One of most important things HUD does is enforce the 1968 Fair Housing Act and the 1988 Fair Housing Amendments Act. The Fair Housing Act of 1968 prohibits discrimination in the sale, rental or financing of housing based upon race, color, religion, sex or national origin. The Fair Housing Amendments Act also protections you from discrimination based upon disability or family status by making such discrimination illegal.

The Fair Housing Amendments Act also increased HUD's enforcement power. The act empowered HUD attorneys to bring administrative enforcement proceedings before an administrative law judge (ALJ) on behalf of alleged victims of housing discrimination. It also enlarged the U.S. Department of Justice's ability to sue on behalf of victims in federal court. By adding more teeth to enforcement, the act better protects you against housing discrimination.

HUD Complaint Process

Let's suppose you believe you've been a victim of housing discrimination in violation of the Fair Housing Act or the Fair Housing Amendments Act; you can file a complaint with HUD. The complaint process starts with you contacting HUD via phone, mail or the internet, after which you are interviewed by a HUD representative.

If your grievance falls within HUD jurisdiction, HUD will compose a formal complaint that meets all the legal requirements, which you will review and sign.

HUD will then deliver the complaint to the party you claim is violating the fair housing laws (called the respondent) and will commence a formal investigation. The investigation may include interviewing the parties and witnesses and reviewing relevant documents.

HUD will offer both parties an attempt at conciliation before it reaches a decision. Conciliation is a voluntary settlement between the parties. You can think of conciliation as a type of mediation where parties try to come together to reach an settlement without an adversarial proceeding like a lawsuit. If conciliation is reached, the case will be closed.

If the parties can't reach a conciliation, the next step is for HUD to determine whether reasonable cause exists to believe that housing discrimination has occurred or is about to occur. If HUD decides there's no reasonable cause, it will take no further action, but the complaining party (called the complainant) will be able to file a lawsuit against the respondent in federal court.

On the other hand, if HUD finds reasonable cause to believe that housing discrimination has occurred or is about to occur, the process continues. You and the respondent will have the option to slug it out in an administrative proceeding before an administrative law judge or in a U.S. district court. If you both decide to pursue the matter in an administrative hearing before an administrative law judge, a HUD attorney will be appointed for the complainant. If district court is selected, the U.S. Department of Justice will start the lawsuit on behalf of the complainant. In either case, you'll have a right to appeal.

Affordable Housing - Housing Choice Vouchers

HUD's Housing Choice Voucher Program (often referred to as Section 8 housing) assists very low-income families find safe and sanitary housing. If your family qualifies, it can choose to live anywhere that meets the program requirements, including single-family houses, townhomes and apartments. Your family will receive a voucher that is applied against rent. In practical terms, the local public housing authority will pay the subsidy directly to the landlord, and you'll pay the remaining balance due after the subsidy is applied. In some cases, your family may use its voucher to buy a home.

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