Federal Civil Rights Law
Fair Housing Laws Explained for Real Estate Exam Students
Fair housing is guaranteed to appear on your real estate exam. Here are the seven federal protected classes, common violations (blockbusting, steering, redlining), and the narrow exemptions agents need to know.
The Fair Housing Act of 1968
The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) prohibits discrimination in the sale, rental, and financing of housing based on protected characteristics. The Act was strengthened by the Fair Housing Amendments Act of 1988, which added disability and familial status as protected classes.
State and local fair housing laws may add additional protected classes beyond the federal seven. Agents should know both federal and their state's protected classes.
The 7 Federal Protected Classes
Race
Prohibited under the Civil Rights Act of 1866 and the Fair Housing Act. No exemptions ever apply to race.
Color, National Origin, Religion
Color (skin tone), national origin (country of ancestry), and religion added in 1968. Cannot refuse to sell or rent based on any of these characteristics.
Sex
Gender. Courts have interpreted this to include sexual harassment in housing. Some states extend protection to sexual orientation and gender identity.
Disability
Physical or mental impairment that substantially limits a major life activity. Includes duty to provide reasonable accommodations and allow reasonable modifications. Added 1988.
Familial Status
Presence of children under 18 in the household (including pregnant women). Qualified senior housing communities are exempt. Added 1988.
Fair Housing Violations
Blockbusting
Inducing owners to sell by implying that protected-class persons are moving into the neighborhood and property values will decline. Also called panic selling. Illegal.
Steering
Directing buyers or renters toward or away from specific neighborhoods based on their protected class. Even 'positive' steering is illegal.
Redlining
Refusing to make loans or insurance available in specific geographic areas based on the racial composition of those areas.
Discriminatory Advertising
Using language or images in advertising that indicates a preference for or against protected classes.
Reasonable Accommodation
A change in rules, policies, or practices to allow a person with a disability equal access to housing. Landlords must provide reasonable accommodations at no cost to the tenant.
Reasonable Modification
A structural change to allow a person with a disability full use of the property (e.g., installing grab bars). Landlords must permit modifications; tenants typically pay the cost in private housing.
Fair Housing FAQ for the Exam
Are there exemptions to the Fair Housing Act?
Yes, but only narrow ones: (1) Owner-occupied buildings with 4 or fewer units ('Mrs. Murphy exemption'). (2) Single-family homes sold or rented by the owner without a broker. (3) Religious organizations and private clubs for non-commercial housing. Note: There are NO exemptions for race — ever.
What is the difference between the Fair Housing Act and the Civil Rights Act of 1866?
The Civil Rights Act of 1866 (42 U.S.C. § 1982) prohibits racial discrimination in ALL real estate transactions with NO exemptions. The Fair Housing Act of 1968 has 7 protected classes and some narrow exemptions. For race, always apply the 1866 Act — zero exceptions.
What qualifies as 'familial status' under fair housing?
Familial status protects households with one or more children under 18 (including pregnant women and people in the process of gaining custody). Senior housing communities that qualify under HUD's criteria are exempt.