In Major Policy Shift, City Makes Credit Checks Optional for Affordable Housing Applicants

The de Blasio administration announced Wednesday that it will no longer require credit checks for those applying to the city’s affordable housing lottery, among other changes that will go into effect immediately — answering calls from housing advocates who’ve pushed for years for a more inclusive policy.

Qualifying applicants to the city’s affordable housing lottery will now have the option to forgo a credit check, and can instead choose to provide evidence of 12 months of rent payments, according to the Department of Housing Preservation and Development (HPD)’s updated guidelines. Applicants also have the option of providing their own existing credit check if it was run within the past 30 days, the city says.

Other changes to make the housing lottery more accessible are underway: HPD is  lowering the fee it charges for credit checks to reflect recent changes in state law, which as of June set the maximum amount that can be charged for background and credit checks to $20 per application. It has also expanded its occupancy guidelines to increase the size of qualifying households for affordable apartments by one person per unit: For example, households of 1-2 people can now apply for an affordable studio, as opposed to just a single applicant. The new rules allow for 1-3 people to qualify for an affordable one-bedroom, or 2-5 person households for a two-bedroom apartment — a move the city says provides flexibility to accommodate different types of families.

HPD says the changes will increase access to affordable housing for many New Yorkers across the city, and “reduce the chances of a tenant being denied a unit due to poor credit history.”

“We will continue to challenge the practices that have perpetuated inequality and injustice for decades,” HPD Commissioner Louise Carroll said in a statement. “These new changes, paired with the grassroots work we’re doing with the Where We Live NYC initiative, are moving the needle toward our goal to make New York the fairest big city in the country.”

Ana Nunez, constituent services specialist at Churches United For Fair Housing (CUFFH), said the policy shifts are “so important.”

“It will remove two important barriers in the city’s affordable housing lottery process,” she says. “With rent history being taken into consideration before credit history, members of the community will be able to better demonstrate a consistent record of paying their rent on time, not their credit card bills. This will impact many families and elderly people who work hard to live in stable housing.”

The changes will also make it easier for the city’s immigrant communities to access affordable housing, experts say. Before the new policy, housing lottery applicants would need to provide either a Social Security Number or an Individual Taxpayer Identification Number (I-TIN) for every adult in the household. Housing advocates say they asked the city almost a decade ago to reform its credit check policy, and the city compromised by allowing the use of the I-TIN on applications — but many applicants were still being denied affordable units.

“The elimination of the SSN/TIN requirement in the lottery process will have a dramatically positive effect on members of the immigrant community of NYC. Now, we are one step closer to truly becoming a Sanctuary City for all,” Nunez says. “Documented or undocumented, immigrants work, pay taxes, send their children to school, and participate in the community, and deserve to fully participate in the city’s affordable housing initiative like everyone else.”

Advocates say the city was initially wary of how affordable housing developers would react to doing away with the credit check requirement. But HPD says it has been examining the policy over the last few years, and wanted to make sure it was the most inclusive it could be.

CUFFH co-founder and executive Rob Solano says the new policy will offer a fairer shot to applicants who may not have perfect credit, but are still good tenants who pay their rent on time. “Our community’s culture is different,” he says. “We give priority to rent and taxes, and then comes all the other bills like the cell phone bill.”

The updated policy change will be in the HPD “marketing handbook,” which lays out guidelines for the selection of residents for affordable housing projects supported by city agencies, and is used by companies hired by the developer.

Applicants who qualify for the affordable housing lottery and choose to show their rent payment history instead of a credit check can submit documents such as formal rent receipts; evidence of monthly withdrawals, payments or transfers; money order receipts or copies, canceled checks, a landlord’s written record of rent payment (such as a rent ledger) among other documents, according to the new rules.

If the applicant doesn’t have the documents during their eligibility appointment, then they have five business days to submit them. If the rent payment information is incomplete or invalid, the landlord could be contacted or a credit check might still be conducted, with the applicant’s consent, according to the new policy.