ACLU Asks VHDA to Change Policy on Income Pooling for Mortgages

Current Policy Discriminates Against Elderly, Disabled, Single Parents, Gays, Lesbians

The ACLU of Virginia today asked the Board of Commissioners of the Virginia Housing Development Authority to support a proposed policy change that would allow individuals not related by marriage or blood to combine incomes in order to qualify for VHDA loans for homebuyers.

The effect of the current policy is that unrelated elderly or disabled individuals, single parents, and gay or lesbian couples who live together cannot pool incomes to purchase a home through VHDA, even when these households meet all other criteria for obtaining loans.

The current policy was adopted in 1996, reversing a more expansive policy that had been in effect since 1994. The 1996 public hearings were acrimonious, as VHDA was accused of changing the policy to discriminate against the elderly, the disabled, and gays and lesbians.

Anticipating the proposed change, legislators in the 2002 General Assembly attempted to take preemptive action through a bill that would have frozen the VHDA policy in its current form. That bill, introduced by Delegate Ryan McDougle, passed the House of Delegates on a 61-38 vote, but was tied up in the Senate Laws Committee.

The proposed policy change would bring VHDA in line with similar state and federal housing programs across the country. The National Council of State Housing Agencies reports that it knows of no other state agency comparable to VHDA in the nation that confines joint purchases to persons related by blood or marriage. In addition, Fannie Mae, Freddie Mac, FHA and other national level housing programs do not place such restrictions on prospective homebuyers.

In their letter to VHDA, ACLU of Virginia executive director Kent Willis and Public Policy Director Aimee Perron write: “The proposed change brings only benefits. It will allow many elderly and disabled individuals on fixed incomes to realize the dream of owning their own homes. It will allow single parents struggling to raise their children on a one salary to come together under one roof, where they can share expenses and child rearing duties. It will also be one more small step toward recognizing that gay and lesbian families are entitled to equal treatment in our society.”

A copy of the full text Willis and Perron’s letter to VHDA follows. VHDA will hold a public hearing on the proposed policy this Thursday, July 24, at 3:00 p.m.

Contacts: Kent Willis, Executive Director, ACLU of Virginia
              Aimee Perron, Legislative & Public Policy Director 804-644-8022

July 22, 2003

Charles L. Krum, Jr.,Vice Chair
Board of Commissioners
Virginia Housing Development Authority
601 South Belvidere St.
Richmond , VA 23220

Dear Vice Chairman Krum:

We are writing to urge you to support the amendments to regulation 13 VAC 10-40-30 that would expand opportunities for income pooling by individuals seeking VHDA loans. The proposed change would eliminate the current requirement that persons who jointly purchase property under the VHDA program be related by marriage or blood, or have a legal custodial relationship.

As you are well aware, VHDA’s current policy prevents unrelated elderly or disabled individuals, single parents, and gay or lesbian couples from combining their resources to qualify for a VHDA home mortgage, even when these households meet all other criteria for obtaining loans.

In 1996, when VHDA last addressed this issue, a policy similar to the proposed policy had been in effect for a year and a half. Over that time more than 11,000 loans were issued, of which only about 600 were made to two or more individuals not related by blood or marriage. Although the number of households with unrelated income earners is growing in Virginia and nationwide, under the proposed policy, the vast majority of loans will still be awarded to married couples and single heads of household. The difference, should the new policy be adopted, will be that elderly and disabled individuals who wish to live together as well as gay and lesbian couples will now have the same access to these loans as married or blood-related individuals.

The proposed change would also place VHDA in line with similar state and federal housing programs across the country. The National Council of State Housing Agencies has reported to us that it knows of no other agency comparable to VHDA in the nation that confines joint purchases to persons related by blood or marriage. In addition, government sponsored enterprises, such at Fannie Mae and Freddie Mac, do not require participating mortgage companies to restrict income pooling. To our knowledge, no such restriction exists under FHA regulations either.

If there is no indication that opening the loan application process in the early nineties in Virginia undermined family values, and if every other similar agency at the state and federal level does it, it stands to reason that VHDA should do it, too.

The proposed change brings only benefits. It will allow many elderly and disabled individuals on fixed incomes to realize the dream of owning their own homes. It will allow single parents struggling to raise their children on a one salary to come together under one roof, where they can share expenses and child rearing duties. It will also be one more small step toward recognizing that gay and lesbian families are entitled to equal treatment in our society.

Again, we urge you to make this change.

Sincerely,
Kent Willis, Executive Director
Aimee Perron, Legislative & Public Policy Director

Cc: VHDA Board of Commissioners