ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, March 29, 1996 TAG: 9603290080
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: LESLIE TAYLOR STAFF WRITER
NOTE: Above
VIRGINIA'S TERMINOLOGY for a household keeps changing, preventing some people from getting low-interest housing loans.
The U.S. Justice Department is conducting an inquiry into whether the Virginia Housing Development Authority is violating federal law with a policy that denies low-interest home loans to unmarried couples, including gays and lesbians.
Ronnie Tharrington, deputy administrator for the federal Rural Housing Services in Washington, said Thursday that the Justice Department was examining whether the policy violates the Equal Credit Opportunity Act. He characterized the Justice Department's action as an "inquiry" rather than an "investigation."
The Justice Department would not confirm or deny the inquiry.
Concerns about the policy's legality were raised two months ago by Lloyd Jones, Virginia state director for the federal Rural Economic and Community Development Service. Jones said he and other representatives of his agency met with the Justice Department this month to discuss those concerns.
"The conclusion was formed that the Department of Justice should be the entity that would investigate this further," Jones said this week. "It's out of our hands. Their [inquiry] will dictate what actions are taken."
Rural Housing Services is a division of the Rural Economic and Community Development Service, a federal financing agency under the Department of Agriculture.
The Virginia housing authority's board of commissioners agreed in 1994 to allow homosexual and unmarried heterosexual couples to obtain low-interest mortgages by substituting the word "household" for "family" in its regulations for borrowers buying single-family homes. The change was made to conform to federal and state law - primarily the Equal Credit Opportunity Act, which prohibits lending institutions from discriminating against an individual or household based on marital status.
But it became a point of controversy, viewed by some individuals and organizations as undermining the traditional family unit. The board voted in January to return to its former policy of making loans only to people related by marriage, blood or adoption. That policy had been in effect from 1981 to 1994.
Returning to the former policy has sparked controversy again - this time, about discrimination. The January policy change, requested by Gov. George Allen in a letter to commissioners last year, was criticized by gay-rights advocates and civil libertarians who said it makes Virginia one of the nation's most discriminatory states.
Allen has defended the VHDA policy as embodying a "common sense" definition of family. Civil liberty organizations have threatened to sue, saying that the narrower definition of family discriminates against a wide variety of qualified home buyers: homosexuals, unmarried couples or single parents trying to pool their resources.
"Undoubtedly, it is aimed at gay and lesbian relationships," said Ted Edlich, president of Roanoke's Total Action Against Poverty. "I would also think it is aimed at heterosexual couples living together who want to buy a house together who might even intend at some point to get married.
"My guess is that [the policy] won't stand the test of law."
Jones wrote to the authority's commissioners in January expressing concern that the new policy violated the Fair Housing Act of 1988, various civil rights laws and the Equal Credit Opportunity Act.
The authority's board of commissioners held a retreat and board meeting Monday at Hotel Roanoke. Mike Anderson, a spokesman for the authority, said the policy was not discussed.
"We continue with the policy," he said. "At this point, there's been no change; and we don't anticipate one, unless an outside group requires us to reconsider the issue.
"The authority's position remains the same. We have a legal opinion to show we are in full compliance with all applicable federal housing law."
Jones declined to say whether he thought the authority should put the policy on hold while it is under review.
"Obviously, they feel correct in their actions," he said. "Otherwise, it would be a high-risk move to continue with this policy."
Jones said the Rural Economic and Community Development Service continues to work with the authority.
"There has been no change in our working relationship with the Virginia Housing Development Authority," he said.
The loan program is for first-time home buyers who are in the low- to moderate-income bracket. The loan carries a cap on income and home sales price. The cap varies statewide depending on cost of living and cost of housing.
Since 1974, 89,036 households in Virginia have received the loans, including 3,598 in the Roanoke Valley.
The VHDA's new policy also has been questioned by two other federal agencies. The Federal Housing Administration had asked the Federal Reserve for an opinion on the policy, Anderson said. The Federal Trade Commission also is examining the policy.
"The FTC is responsible for the enforcement of the Equal Credit Opportunity Act, and the FHA was inquiring because they provide insurance on single-family loans that we make as well as any other housing finance authority in the country," Anderson said. "To date, we have not received or heard any opinion from them."
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