Voucher Discrimination Explained: How Source-of-Income Laws Protect Tenants and Landlords
Context & policy goal
Source-of-income (SOI) discrimination happens when a housing provider refuses to rent, renew, or set fair terms to someone because of where their rent money comes from — for example, a Housing Choice Voucher (Section 8), a state or local rental subsidy, Social Security benefits, disability income, child support, alimony, or other lawful, verifiable income. In many U.S. states and cities, this is now expressly prohibited. Even in places without an explicit ban, federal fair-housing principles still limit practices that disproportionately screen out protected groups.
Because voucher payments are usually guaranteed and on time, excluding them is a risk, not a benefit. This guide shows how to build a compliant screening flow that accepts vouchers and lawful income without losing rent security.
Quick Guide (English)
- Do not refuse to accept Housing Choice Vouchers, state/local subsidies, or other lawful, verifiable income if your jurisdiction bans SOI discrimination.
- Calculate affordability on the tenant’s portion only (the amount the family pays out of pocket), not on the full contract rent, when a subsidy will pay the rest and the local rule says to do so.
- Use the same rent, deposit, and fee schedule for voucher and non-voucher applicants. No “voucher surcharge.”
- Screen neutrally: Apply criminal, eviction, and credit criteria the same way to all applicants; document individualized assessments for negative records.
- Coordinate unit inspection and HAP contract: slowing or refusing to sign HAP papers can be treated as constructive discrimination.
- Train staff and leasing agents on words they may not use (“we don’t take Section 8,” “we only rent to people who work”) and on how to offer reasonable time for PHA steps.
What counts as “source of income”?
Exact definitions vary, but SOI-protection laws usually cover:
- Federal vouchers: Housing Choice (Section 8), VASH, Mainstream, HCV port-ins.
- State/local/rural subsidies: Emergency rental assistance, state housing trust, local housing authority payment standards.
- Government benefits: Social Security, SSI, SSDI, unemployment, veterans’ benefits.
- Family-support payments: child support, alimony, foster-care stipends.
- Lawful earnings: wages, self-employment, pension, annuities.
Key idea: if the money is lawful, traceable, and intended for housing or basic support, you cannot use its source as a reason to reject or impose worse terms where SOI is protected.
“Graphics” info — what landlords may and may not do
| Action | Allowed? | Notes |
|---|---|---|
| Advertising “No Section 8” / “No vouchers” | No (in SOI jurisdictions) | This is direct evidence of SOI discrimination. |
| Applying higher income multiplier to voucher holders | No if law says calculate on tenant portion | Use the same 2.5x–3x rule but on the tenant share. |
| Charging higher deposits/fees for voucher tenants | No | Must be same deposit schedule for similarly situated renters. |
| Refusing to complete PHA paperwork/inspection | No (often treated as a denial) | Delays that kill the tenancy are still discrimination. |
| Verifying income/benefits | Yes | You may verify, but you cannot reject because the income is a voucher. |
How to screen voucher holders correctly
- Collect the application exactly the same way as for any other applicant.
- Identify payment sources: “PHA pays $X,” “Tenant pays $Y,” “utility allowance $Z.”
- Apply income/rent ratio to the tenant’s portion only. Example: rent = $1,800; voucher pays $1,450; tenant pays $350. If your rule is 3x, require about $1,050 in monthly verifiable tenant income — not 3x $1,800.
- Run credit, criminal, and eviction checks in a neutral way. If you use a “matrix” or point system, document individualized assessments and give a chance to provide mitigating information.
- Disclose deposits and move-in monies with the same rates and caps as other tenants; issue receipts and refund rules.
- Work with the PHA to schedule inspection, rent reasonableness, and HAP contract signature. Do not rescind the offer solely because of inspection timing.
Income ratios and the “tenant portion” rule
Many SOI-protection laws say: if a third party is paying part of the rent, you must treat that part as paid and measure the applicant’s financial capacity only on the part they must personally pay. This prevents “we require 3x the full rent” traps that silently exclude voucher holders.
Unit rent: $2,000. Voucher covers: $1,650. Tenant share: $350. Neutral rule: “income 3x monthly rent due from household.” Tenant must show ≈ $1,050/month in lawful income. If the landlord insists on 3x $2,000, that is likely SOI discrimination in protected areas.
Fees, deposits, and “junk” charges
Do not add or increase application fees, screening fees, pet deposits, or move-in fees because a person uses a voucher. Fee caps and application-fee rules (which we treated in the previous article) apply equally to voucher applicants. Where assistance animals are involved, no pet deposit or pet rent is permitted, although actual damage can be charged at move-out.
Retaliation and steering
It is also discrimination to say: “We only put voucher tenants on lower floors,” “We only rent vouchers in Building C,” or “We only approve vouchers for smaller units,” unless a legitimate housing-program rule (e.g. bedroom-size standard) requires that assignment. Treat voucher households the same way you treat non-voucher households for unit type, location, renewal, and transfer.
FAQ (English)
What is source-of-income discrimination exactly?
It is refusing to rent, imposing worse terms, or discouraging someone because they pay rent with a voucher, benefit, or other lawful income. In many states and cities, this is unlawful even if federal law in general does not list SOI as a protected class.
Can I say “we don’t work with PHAs”?
No, not where SOI is protected. Refusing to sign HAP contracts, to allow inspections, or to do the basic admin is treated as a denial of a voucher applicant.
Can I still screen for criminal or eviction history?
Yes. You can screen on neutral, documented criteria. But you cannot make the criteria more strict just because the applicant has a voucher, and you must follow local “fair chance” rules on what records you may consider.
What if the tenant’s portion is very small — like $50?
You can still require verification of that amount and normal move-in funds. You cannot deny just because the PHA is paying “too much” of the rent.
Do I have to advertise that I take vouchers?
Some localities require you to include SOI-friendly language or at least to avoid discriminatory phrases. Even where not required, neutral ads protect you from complaints.
Can I charge a bigger security deposit for voucher tenants?
Generally no. Deposits must follow the same formula for all tenants and must stay within statutory caps.
What if the PHA inspection fails?
Fix the cited items and re-inspect. Repeated bad-faith failures or delays can look like de facto discrimination.
What about income from child support or alimony?
Those are typically lawful sources of income. You may verify them (e.g. court order, bank statements), but you cannot refuse because you prefer “employment income only.”
Do I need to change my software to support partial-rent payments?
Yes, operationally it helps. Systems should accept “rent from PHA + rent from tenant,” track inspection dates, and flag when HAP is pending so staff does not close the file prematurely.
What if my state has no SOI law?
You may still face exposure under local ordinances (city/county) or under federal theories if your practice disproportionately excludes a protected group. Safer path: adopt an SOI-friendly policy anyway.
Base of authority & legal architecture (English)
1. State and local SOI statutes/ordinances. Many U.S. jurisdictions have enacted laws that add “lawful source of income” or “housing assistance” to their list of protected classes. These laws typically:
- Ban advertising or statements such as “No Section 8.”
- Require landlords to accept vouchers and complete PHA paperwork.
- Require affordability to be calculated on the tenant portion.
- Prohibit discriminatory deposits, fees, or lease terms.
2. Federal Fair Housing Act (FHA) — disparate impact / associational theories. Even though the FHA does not list “source of income” as a federal class, rejecting vouchers can disproportionately harm disabled, elderly, or minority households that rely on assistance. That can lead to disparate-impact or discriminatory-statement claims.
3. HUD guidance and PHA contracts. Housing agencies’ HAP contracts and Admin Plans require participating landlords to not discriminate on the basis of participation and to allow inspections and rent reasonableness. Refusing to do these steps is a compliance breach.
4. Consumer & tenant-protection rules. Many local rental codes treat “taking a fee or deposit and then refusing solely because of a voucher” as an unfair practice and require refund of the money.
Operational checklist (paste into SOP)
- ☑ Remove all “No Section 8 / No vouchers” language from ads, websites, phone scripts.
- ☑ Add a line: “All lawful sources of income, including rental assistance, are welcome.”
- ☑ Update screening criteria to calculate income on the tenant share when assistance pays the rest.
- ☑ Train staff on timelines for PHA inspections and HAP signature.
- ☑ Use the same application fee and deposit schedule for all applicants.
- ☑ Keep records of every denial, including the true, neutral reason.
- ☑ Send adverse-action notices when a consumer report is part of the denial.
Conclusion
Source-of-income protections push the market toward equal access for renters who rely on vouchers or other lawful payments. Compliance is straightforward: accept the subsidy, underwrite only the tenant’s portion, treat move-in money the same way, finish the PHA paperwork, and document every denial with a neutral, supportable reason. Doing this reduces complaints, expands the pool of renters you can lawfully approve, and secures a portion of rent that is practically guaranteed.