ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, March 2, 1996 TAG: 9603060008
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE: MICHAEL G. MILLER
A COMMENTARY printed in your newspaper on Jan. 28 (``Gov. Allen pushes loan bigotry'' by Albert C. Eisenberg) criticized the recent change in the Virginia Housing Development Authority's single-family loan regulations.
The author based his criticism on an incorrect description of both the purpose and the effect of this regulatory change. As chairman of the VHDA Board of Commissioners, I'd like to set the record straight.
But first, to set the context for this change, I believe it's appropriate to note that President Bill Clinton and House Speaker Newt Gingrich, two individuals who occupy vastly different political and philosophical ground, agree that our nation's grimmest social pathologies stem largely from the breakdown of families.
This is the problem that motivated VHDA board members when they approved regulations on Jan. 23 to identify the family unit for lending purposes as ``two or more individuals related by blood, adoption or marriage, or legal custodianship.'' The rule change serves a valid state interest in promoting families and allocating limited financial resources to those families, and it's consistent with legislation adopted by Virginia's General Assembly that created the VHDA in the early '70s.
In the past two decades, more than 90,000 individuals and families across Virginia have become first-time homeowners, and have built strong, lasting households using VHDA mortgage-loan financing.
VHDA raises its mortgage capital by selling bonds in the national municipal market, and it doesn't rely on state or federal tax dollars. However, bond proceeds from these sales have been and will continue to decline, limiting the amount of loans available.
Despite allegations and claims to the contrary, VHDA's newly adopted policy is consistent with all federal housing laws, and it doesn't discriminate against unmarried or gay couples. VHDA's critics want to use this decision to advance their own political and social agendas. Their rhetoric is vociferous, and their charge is false.
The rule change doesn't in any way address sexual orientation or the applicant's behavior. Indeed, the VHDA neither inquires about sexual orientation nor precludes homosexuals from either living together or receiving a VHDA loan, so long as they are low- or moderate-income persons or families.
Non-mortgage holders who might occupy the property and, of course, single-loan applicants aren't affected. Exemptions for unrelated persons may be granted in the case of hardship if one of the borrowers is elderly or disabled.
Our decision merely restored the VHDA's single-family lending regulation to the policies that existed from April 1980 to June 1994. It did so without any litigation or administrative action by the federal or state governments or by loan applicants.
Two other points should be made clear.
* The federal Equal Credit Opportunity Act provisions relating to marital status do not apply to eligibility requirements under ``special purpose credit programs.'' Because VHDA's single-family loan program is authorized by state law to benefit an economically disadvantaged class of persons (low- and moderate-income persons and families), it qualifies as a ``special purpose credit program'' under ECOA regulations. As such, it may require loan applicants to possess common characteristics, including marital characteristics, which would otherwise be prohibited.
ECOA authorizes credit decisions based on eligibility requirements under a ``special purpose credit program.'' So, a denial of credit to unmarried joint-loan applicants isn't a violation of ECOA.
* Federal fair-housing laws do not prohibit discrimination on the basis of marital status or sexual orientation. Familial-status discrimination, which is prohibited, is defined as discrimination because minor children live in the household. VHDA's regulation doesn't discriminate on this basis.
After a diligent review of these and other issues, the VHDA's board made a decision that supports family values and allocates limited resources to promote homeownership.
We fully expect that a review of the above-referenced laws will establish the legality of this action. VHDA is prepared to vigorously contest any action that seeks to disqualify it from access to federal housing programs or loan guarantees, which in turn would hinder the authority's ability to provide Virginians with safe, sound and decent housing otherwise unaffordable to them.
Michael G. Miller is chairman of the Virginia Housing Development Authority Board of Commissioners in Richmond.
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