What You Need to Know About MLK’s Fair Housing Legacy

January 13, 2016 | By

Twenty years before the first Martin Luther King Jr. Day, a rock hit Martin Luther King Jr. in the head.

It’s Aug. 5, 1966. King is leading a march through an all-white neighborhood on Chicago’s West Side.

Protestors call for an end to housing discrimination. Local residents are unhappy. Hostilities ensue, and a hurled rock smacks King in the head.

By the end of August 1966, King negotiates agreements with local officials. The agreements call for desegregating public housing and enforcing open housing laws.

Two years later, a week after King’s death, Congress passed the Fair Housing Act.

“The Fair Housing Act was landmark legislation that acknowledged, on its passage, that systemic forces and individual acts of discrimination were perpetuating racial segregation in the U.S.,” says Bryan Greene, general deputy assistant secretary for the Office of Fair Housing and Equal Opportunity at the U.S. Department of Housing and Urban Development (HUD).

Needed Then, Needed Now 

Born out of King’s efforts against housing discrimination, the Fair Housing Act has evolved over time.

Originally, the act banned discrimination during the sale, rental, and financing of housing based on a person’s religion, race, national origin, and sex. Today, the Fair Housing Act protects people from housing discrimination based on race, color, national origin, religion, disability, sex, and familial status.

When the Fair Housing Act passed in 1968, race-based housing policies were prominent in cities throughout the U.S. While today racial segregation in housing may not be as obvious as it once was, there are still examples of housing discrimination.

In May, HUD settled its largest “redlining” case in history. “Redlining” refers to a practice first identified in the 1930s where U.S. neighborhoods populated by racial minorities were deemed unsuitable for mortgages and outlined on maps in red.

And as the nation’s demographics shift, the face of housing discrimination is also changing.

Greene says housing discrimination can be more subtle and continues to be found in tests conducted by the Fair Housing Justice Center, a New York City-area fair housing organization. In one test, white borrowers with lower income and worse credit histories than racial minorities are offered better mortgages than minority borrowers.

Bridging the Gap

Expanding homeownership to more qualified borrowers, including minority households, is the goal of HomeReady™, a mortgage product offered by Fannie Mae, which also publishes The Home Story.

“HomeReady is designed to reflect and meet the needs of the way we live today,” says Anne McCulloch, Fannie Mae’s senior vice president of credit and housing access. “It is designed to more accurately reflect the resources that households actually have.”

HomeReady lets lenders consider income generated by extended household members, income from a boarder or tenant, and support from a parent or child who owns their home and can serve as a co-borrower for their family member’s mortgage, she says.

By way of example, Joe Nery, president-elect of the National Association of Hispanic Real Estate Professionals, recently told National Mortgage News, “This model works well for Hispanics with multigenerational and multifamily households” where you have several individuals contributing to the mortgage payment.

For Many, The Struggle Continues

It’s been 50 years since that rock was thrown at MLK as he walked through a South Chicago white neighborhood and 45 years since the passage of the federal Fair Housing Act.

“We still find, too frequently, that racial minorities face discrimination when they seek housing,” says Greene.

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