New CFPB Guidance for Preventing Mortgage Applicant Discrimination

The Consumer Financial Protection Bureau (CFPB) released new guidelines designed to assist mortgage lenders with avoiding discrimination against loan applicants who receive income via the Section 8 Housing Choice Voucher Homeownership Program.

The goal of the Section 8 Housing Choice Voucher Homeownership Program is to help first-time home buyers with low income. Participants in the program are provided with a monthly housing assistance payment in the form of a voucher, which is used for covering homeownership expenses related to the purchased property. The program receives funding from the Department of Housing and Urban Development and is executed by local public housing authorities.

In a special bulletin, CFPB states that the Bureau has become aware of mortgage lending institutions that refuse to consider the income of applicants received via the Section 8 Housing Choice Voucher Homeownership Program during the process of loan application and underwriting. There are also reports of lenders restricting the use of the vouchers from the Program only to specific mortgage loan products and channels of distribution.

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Under the Equal Credit Opportunity Act and Section B, mortgage lenders are prohibited from discriminating any part of a credit transaction against the applicant due to portion or all of the applicant’s income coming from a public assistance program. Section B also states that whether a mortgage applicant’s income comes from a public assistance program can be considered only for determining their credit worthiness. The refusal to consider vouchers from the Program or the restriction of their use may violate the rules of ECOA and Section B.

The Director of CFPB, Richard Cordray, said that everyone deserves to the opportunity to qualify for a mortgage loan that they can afford given their stable income. He also noted that consumers should not be put in a disadvantageous position because of receiving public assistance.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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