The Department of Housing and Urban Development (HUD) announced today that it is suing Bank of America over claims of discriminating against homebuyers with disabilities. 

HUD alleges that Bank of America imposed unnecessary and burdensome requirements on borrowers who relied on disability income to qualify for their home loans, contrary to the Fair Housing Act.

The Fair Housing Act makes it illegal to discriminate in the terms and conditions of a loan to an individual based on a disability, including imposing different application or qualification criteria, and makes it illegal to inquire about the nature or severity of a disability.

"Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law," said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity in a statement. "Mortgage companies may verify income and have eligibility standards but they may not single out homebuyers with disabilities to delay or deny financing when they are otherwise eligible."

HUD’s case sprang from complaints filed by two individual borrowers in Michigan and one borrower in Wisconsin, who said that Bank of America required them to provide personal medical information and documentation regarding their disability and proof of continuance of their Social Security payment in order to qualify for a home mortgage loan. 

The case is one of the efforts of the Federal Financial Fraud Enforcement Task Force’s non-discrimination working group. President Obama launched the task force in November 2009.