Applied Example — Handling a Discrimination Complaint

Maria Gonzalez applied for a 2BR apartment in a 24-unit complex managed by Green Valley Properties. She met the income requirement (3.2x rent) and had positive rental history but was denied due to a credit score of 595 (below the stated minimum of 620). Maria filed a HUD complaint alleging national origin discrimination, claiming that Green Valley denied her application because she is Latina. HUD opens an investigation and contacts Green Valley for response, requesting all application records, screening criteria, and the last 12 months of application decisions.

Green Valley's compliance system provides a comprehensive defense. They produce: the written screening criteria document, dated and signed six months before Maria's application, specifying the 620 minimum credit score. The application decision log showing 47 applications processed in the prior 12 months with 31 approvals and 16 denials—denials include applicants of all ethnicities, and approvals include 8 Hispanic/Latino applicants. Maria's application file with the credit report showing a 595 score and the adverse action notice mailed within 3 business days. Three other applicant files with credit scores below 620 (of varying ethnicities) who were also denied. The documentation demonstrates consistent, race-neutral criteria application.

HUD reviewed the documentation and determined no reasonable cause. The complaint was dismissed within 90 days. Without documentation, this case could have resulted in a very different outcome. Key lessons: screening criteria must be written before the first application, the application decision log must show consistent application across all protected classes, adverse action notices must be sent timely per FCRA, and comparable denials across demographics demonstrate pattern consistency. Green Valley spent approximately $2,500 in attorney fees to manage the response—a fraction of the $15,000–$25,000 typical settlement if documentation had been lacking.