Can SSDI Prevent You From Buying A Home?

You’re finally getting a home, so you go to the bank and start the mortgage application process. The lenders ask you tons of questions and then they ask you for proof of continuing income. When you tell them you are on Social Security Disability Insurance, they ask for proof of continuing enrollment. You get what they ask for, jump through all their hoops, but in the end they deny your application. What did you do wrong? Nothing, but the bank may have just broken federal law.

Can SSDI Prevent You From Buying A Home?Photo of a Couple Working With a Loan Officer

According to the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA), banks in the U.S. cannot discriminate against people with disabilities or people who receive public assistance when considering a loan application. That means that financial institutions aren’t supposed to ask you for proof of your continuing SSDI benefits or for doctor’s notes concerning any disability you may have. Breaking these mandates can get the financial institution in a lot of hot water with the U.S. Department of Justice (DoJ)—a lesson Evolve Bank & Trust is now learning.

What Did The Bank Do?

Evolve Bank & Trust asked several potential homebuyers for proof of their continuing SSDI benefits by requesting either a doctor’s letter or other documents that confirmed the Social Security Administration would continue benefits. This was a direct violation of FHA and ECOA policy, says the DoJ, and now authorities are about to make this bank pay the price for its actions.

What’s The Punishment For Breaking Federal Policy?

The DoJ reached a settlement with Evolve Bank & Trust requiring the company to use $86,000 to compensate 50 borrowers that the institution discriminated against. Any funds remaining after paying these consumers is slated to go to organizations that provide credit and housing counseling and legal help.

No financial institution in the U.S. is allowed to discriminate against you because of a disability or your SSDI. If you suspect you are being victimized, contact federal authorities, and keep following our blog for even more information you may not have known about your SSDI.

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