NY Credit Scores and Income Requirements

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The source of income law is in limbo now because on June 27, 2023, a Cortland County Supreme Court judge ruled that the law is unconstitutional to the extent that it makes it an unlawful discriminatory practice to refuse to rent to any person because their source of income includes Section 8 vouchers. In other words, landlords are not required to accept Section 8. However, the NYS Attorney General has filed an appeal. A higher New York court could overrule the Supreme Court decision.

There are prohibitions against:

• Income requirements for recipients of publicly funded rental assistance, other than those income requirements set by the housing voucher programs;
• Requiring that a prospective tenant’s voucher cover the entirety of the monthly rent, unless the voucher program prohibits the voucher holder from contributing to the rent; and
• Consideration of a prospective renter’s credit score if such renter’s Housing Choice Voucher, or the renter’s Housing Choice Voucher plus shelter allowance, covers the entirety of the monthly rent.

When a voucher program calculates a tenants’ rent based on their income, the government has already determined that they can afford to pay their required portion. In some instances, tenants will pay no portion of the rent out of pocket. Where a tenants’ rental portion is calculated based on a tenants’ income, it is a violation of the Law to impose any additional income requirements on applicants for housing or to require guarantors or co-signers.

If the voucher/subsidy covers 100% of the rent, you may not reject an applicant based on credit history or score. If the applicants pay a portion of the rent, you may make a credit inquiry. Requiring a specific credit score, however, is evidence of discrimination. Each application should be considered on a case-by-case basis. Prior to rejecting an applicant based on credit, the applicant should be provided an opportunity to demonstrate creditworthiness. To protect yourself under the Law and comply with federal law when making a decision based on a credit report; provide the applicant a written explanation of your analysis. For further information, see these resources:

• New York State’s Credit Policy for Applicants to State-Funded Housing  doc-ra-know-your-rights-credit-10-21.pdf (ny.gov)
• Guide to Applying New York State Credit Policy for Applicants to State-Funded Housing 
• https://hcr.ny.gov/system/files/documents/2023/05/doc-n-guide-to-applying-hcr-credit-policy-final-5.22.2023.pdf
• Individualized Assessment Credit Worksheet Applying New York State Credit Policy for Applicants to State-Funded Housing

https://hcr.ny.gov/system/files/documents/2023/05/doc-u-worksheet-of-individualized-asessment-for-credit-policy-5.22.2023.pdf

Source: https://www.wny-lawyers.com/