Federal Real Estate Law
The Fair Housing Act's protected classes, the practices it prohibits, and the other federal laws that shape every transaction.
Federal real estate law is tested harder than almost any other national-portion topic, because getting it wrong in practice creates real legal exposure — not just a missed exam question.
The Fair Housing Act's seven protected classes
Three practices to know by name
- Steering
- Directing buyers toward or away from a neighborhood based on a protected class.
- Blockbusting
- Inducing panic selling by suggesting a protected class moving in will hurt property values.
- Redlining
- Denying or limiting loans (or insurance) to an area based on its racial or ethnic makeup.
All three are illegal regardless of whether the agent believes they're being helpful — a well-intentioned agent who only shows a family with children listings near parks and schools is still steering.
Reasonable accommodation vs. reasonable modification
These two disability-related duties get confused constantly:
Reasonable accommodation is an exception to a policy or rule — like waiving a no-pets policy for an assistance animal. Reasonable modification is an actual physical change to the unit, like a wheelchair ramp. In most private housing, the landlord generally bears the cost of an accommodation; the tenant generally bears the cost of a modification.
Exemptions exist — but they're narrow
The Fair Housing Act has a handful of recognized exemptions: certain small owner-occupied dwellings (the "Mrs. Murphy" exemption), religious organizations housing their own members, and qualifying housing for older persons. Every one of these exemptions is narrower than it sounds — the Mrs. Murphy exemption disappears the moment a licensed agent is used to find a tenant, and the religious exemption never extends to racial discrimination even when it otherwise applies.
Housing for older persons — the exemption has two versions
The "housing for older persons" exemption from familial-status discrimination isn't one simple rule — it generally requires satisfying specific, defined conditions, and there are two recognized versions:
- 62-and-older housing — every resident must generally be 62 or older, with essentially no exceptions.
- 55-and-older housing — at least 80% of occupied units must generally have at least one resident 55 or older, and the community must generally publish and adhere to policies demonstrating an intent to operate as 55-and-older housing, not merely claim the label informally.
A community that doesn't actually satisfy one of these specific frameworks can't just decide to exclude families with children by calling itself an "adult community" — the exemption is earned by meeting defined conditions, not claimed by preference.
How fair housing complaints actually get enforced
A fair housing violation can be pursued through more than one channel, and the exam expects you to know they aren't mutually exclusive:
- HUD administrative complaint
- A person who believes they've experienced discrimination can file a complaint with the Department of Housing and Urban Development, which investigates and can pursue an administrative hearing.
- Private civil lawsuit
- A person can also sue directly in federal court, independent of whether they've filed with HUD at all.
- DOJ pattern-or-practice suit
- The Department of Justice can separately sue when it identifies a broader pattern or practice of discrimination, not just a single incident.
The other federal statutes on the exam
- ADA — accessibility in public accommodations (a real estate office, not a private home) and, separately, employer obligations under Title I.
- Civil Rights Act of 1866 — prohibits race discrimination in property transactions with no exemptions at all, reaching even purely private transactions.
- ECOA — prohibits credit discrimination, covering some bases (like age) that the Fair Housing Act doesn't.
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