Fair Housing
In Idaho, a property manager sets a policy requiring all prospective tenants to have income of at least 3 times the monthly rent. This policy is:
AAlways a fair housing violation
BGenerally acceptable as a neutral, objective financial qualification standard applied uniformly✓ Correct
COnly valid for properties with more than 20 units
DA violation of the Equal Credit Opportunity Act
Explanation
Income-to-rent ratio requirements applied consistently and uniformly are generally acceptable, neutral screening criteria. They become a fair housing issue only if applied inconsistently or if they have an unjustified disparate impact.
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Key Terms to Know
Fair Housing Act
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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