The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) protect you against discrimination when you apply for a mortgage to purchase, refinance, or make home improvements.

Your Rights Under ECOA
The ECOA prohibits discrimination in any aspect of a credit transaction based on:

race or color;

religion;

national origin;

sex;

marital status;

age (provided the applicant has the capacity to contract);

the applicant’s receipt of income derived from any public assistance program; and

the applicant’s exercise, in good faith, of any right under the Consumer Credit Protection Act, the umbrella statute that includes ECOA.

Your Rights Under FHA
The FHA prohibits discrimination in all aspects of residential real-estate related transactions, including:

making loans to buy, build, repair, or improve a dwelling;

selling, brokering, or appraising residential real estate; and

selling or renting a dwelling.

It also prohibits discrimination based on:

race or color;

national origin;

religion;

sex;

familial status (defined as children under the age of 18 living with a parent or legal guardian, pregnant women, and people securing custody of children under 18); and

handicap.

Lender Do’s and Don’ts
Lenders must:

consider reliable public assistance income in the same way as other income.

consider reliable income from part-time employment, Social Security, pensions, and annuities.

consider reliable alimony, child support, or separate maintenance payments, if you choose to provide this information. A lender may ask you for proof that this income is received consistently.

if a co-signer is needed, accept someone other than your spouse. If you own the property with your spouse, he or she may be asked to sign documents allowing you to mortgage the property.

Lenders cannot:

discourage you from applying for a mortgage or reject your application because of your race, national origin, religion, sex, marital status, age, or because you receive public assistance income.

consider your race, national origin, or sex, although you will be asked to voluntarily disclose this information to help federal agencies enforce anti-discrimination laws. A creditor may consider your immigration status and whether you have the right to remain in the country long enough to repay the debt.

impose different terms or conditions, such as a higher interest rate or larger down payment, on a loan based on your race, sex, or other prohibited factors.

consider the racial composition of the neighborhood where you want to live. This also applies when the property is being appraised.

ask about your plans for having a family. Questions about expenses related to your dependents are permitted.

refuse to purchase a loan or set different terms or conditions for the loan purchase based on discriminatory factors.

require a co-signer if you meet the lender’s standards.

Strengthening Your Application
Not everyone who applies for a mortgage will get one. Lenders can use factors such as income, expenses, debts, and credit history to evaluate applicants.

There are steps you can take to ensure that your application gets full consideration. Give the lender all information that supports your application.

For example, stable employment is important to many lenders. Perhaps you’ve recently changed jobs but have been employed steadily in the same field for several years. If so, include that information on your application.

Get a copy of your credit report before you apply for a mortgage. Reports sometime contain inaccurate information. For example, accounts might be reported that don’t belong to you or paid accounts might be reported as unpaid. If you find errors, dispute them with the credit bureau and tell the lender about the dispute.

If you’ve had past bill-paying problems, such as a lost job or high medical expenses, write a letter to the lender explaining what caused your past credit problems. Lenders must consider this information at your request.