The U.S. Department of Housing and Urban Development will begin requiring applicants seeking grant funding to comply with state and local laws that protect individuals from being denied housing based on their lawful source of income.

This funding requirement is part of a broader effort by HUD to make certain grant applicants meet state and local anti-discrimination laws, including those prohibiting housing discrimination based on a person’s income, such as Section 8 Rental Assistance, Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI) or earnings from seasonal employment.

This week, HUD published a general funding notice detailing the minimum requirements that will apply to all of the Department’s competitively awarded grant programs for Fiscal Year 2010. For the first time, HUD will now require applicants to comply with state and local anti-discrimination laws that prohibit housing discrimination against persons based on their ‘lawful source of income.’

“A family’s source of income should never be used as a basis to discriminate against them,” said HUD Secretary Shaun Donovan. “We are sending a very clear message to those who seek federal funds that we intend to stand up for the cause of civil rights and expect them to do the same.”

John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity (FHEO), added, “Prohibiting this form of discrimination provides an essential protection for many Americans, including disabled veterans, seasonal workers, and persons that are using housing choice vouchers to maintain housing for themselves and their children. Racial discrimination is often perpetrated through denials of housing opportunities to Section 8 voucher holders. It is wrong and HUD will now keep systemic violators from applying for HUD funds.”

Earlier this week, HUD also announced that grant applicants and their sub-recipients must comply with state or local laws banning housing discrimination based on sexual orientation or gender identity. HUD’s minimum funding requirements will now exclude applicants who have been charged with a systemic violation of state or local law proscribing discrimination in housing based on sexual orientation, gender identity or source of income.

Traditionally, HUD requires all applicants for competitive grant funding to comply with all applicable federal fair housing and civil rights requirements including those expressed in Fair Housing Act; Title VI of the Civil Rights Act of 1964; Section 504 of the Rehabilitation Act of 1973; and Title II of the Americans with Disabilities Act.