Housing cooperatives can receive applications from people of varying financial backgrounds. Some applicants have traditional jobs and paychecks. Others rely on social security, veterans’ benefits, housing vouchers or child support.
Under Illinois’ fair housing laws, “source of income” is a protected category. This means that when board members assess applicants, they cannot reject someone simply because of where their money comes from. Let’s break down what this means for your housing cooperative.
What counts as a protected source of income?
The law defines “source of income” as how someone legally supports themselves and their family. It does not matter whether someone earns a paycheck, receives a government benefit or gets financial support another way. If it is legal, cooperatives must accept it. This includes:
- Employment paychecks
- Housing Choice Vouchers and similar subsidy programs
- Federal, state or local housing assistance
- Veterans benefits and VASH vouchers
- Social Security retirement, SSI or SSDI
- Child support and alimony
- Retirement funds and pensions
- Any other lawful income
According to the Illinois Department of Human Rights, cooperatives must treat all these income types equally. They cannot favor one over another. An applicant using a voucher deserves the same consideration as someone with employment income.
Does the co-op need to change its screening standards?
Compliance does not require you to abandon reasonable screening standards. You can still verify income, check credit and confirm that applicants can afford their monthly payments. Here’s what fair screening can look like in practice:
- Documentation: Different income types require different documentation. Co-ops must accept benefit statements, award letters and subsidy certifications just as they would employment pay stubs.
- Marketing: Avoid language that discourages certain income types. Remove phrases such as “No Section 8” or “employment income only” from your advertisements and materials. These violate fair housing law.
- Income calculations: If the co-op has a certain income requirement, the calculation must be based only on what the applicant pays out of pocket, not the total payment.
- Inspections: When applicants use vouchers, housing authority inspections need to verify that the unit meets safety and quality standards. Cooperatives must cooperate with this process.
These practices help you avoid discrimination complaints while still ensuring new residents can afford their monthly payments. The key is to apply the same standards consistently to all applicants regardless of their source of income. Apply the same application fees, credit requirements, background checks and processing timelines.
Consider reviewing your current policies
Fair housing compliance does not have to be complicated. Take some time to walk through your cooperative’s application materials and screening procedures. If you spot potential issues or simply want a second opinion on your policies, consider reaching out to an experienced legal professional for advice. This can help protect both your cooperative and the people who want to call it home.