Permitted Screening Criteria Commonly Used by Owners

1. Overview. Owners are permitted to screen applicants for suitability to help them to determine whether to accept or deny an applicant’s tenancy. Owners should consider at least developing screening criteria related to the following factors and may establish other criteria not specifically prohibited in paragraph 4-8 below. All screening criteria adopted by the owner must be described in the tenant selection plan and consistently applied to all applicants.

2. Screening for credit history. Examining an applicant’s credit history is one of the most common screening activities. The purpose of reviewing an applicant’s credit history is to determine how well applicants meet their financial obligations. A credit check can help demonstrate whether an applicant has the ability to pay rent on time.

   • a. Owners may reject an applicant for a poor credit history, but a lack of credit history is not sufficient grounds to reject an applicant.

   • b. As part of their written screening criteria, and in order to ensure that all applicants are treated fairly, owners should describe the general criteria they will use for distinguishing between an acceptable and unacceptable credit rating. Owners are most often interested in an applicant’s credit history related to rent and utility payments. A requirement for applicants to have a perfect credit rating is generally too strict a standard.

   • c. Owners may determine how far back to consider an applicant’s credit history. Owners generally focus on credit activity for the past three to five years. It is a good management practice to give priority to current activity over older activity.

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• d. Owners may have to justify the basis for a determination to deny tenancy because of the applicant’s credit rating, so there should be a sound basis for the rejection.

3. Minimum Income Requirement. Section 236 and Section 221(d)(3) BMIR applicants who receive no other form of assistance, such as Section 8, may be screened for the ability to pay the Section 236 basic rent or the BMIR rent. Owners may establish a reasonable minimum income requirement to assess the applicant’s ability to pay the rent. In the Section 8, RAP, and Rent Supplement programs, owners may not establish a minimum income requirement for applicants. (See paragraph 4-8.A.)

4. Screening for rental history. In addition to determining whether applicants are likely to meet their financial obligations as tenants and pay rent on time, owners are also interested in whether applicants have the ability to meet the requirements of tenancy.

   • a. Owners must not reject an applicant for lack of a rental history but may reject an applicant for a poor rental history.

   • b. As part of their written screening criteria, and in order to ensure that all applicants are treated fairly, owners should describe the general criteria they will use for distinguishing between acceptable and unacceptable rental history.

5. Screening for housekeeping habits. Owners may visit the applicant’s current dwelling to assess housekeeping habits.

   • a. As part of their written screening criteria, and in order to ensure that all applicants are treated fairly, owners should describe the general criteria they will use for distinguishing between acceptable and unacceptable housekeeping practices.

   • b. Owners must establish reasonable standards which can be consistently applied to all families. Messy living quarters are not the same as safety and health hazards.

   • c. In defining the home visit standards, the owner should establish a geographic radius within which home visits are made, and outside of which home visits are not made. It is impractical to establish a policy requiring home visits for all applicants, which might require the owner to visit units many miles from the property. For example, an owner may determine that 50 miles is the maximum distance that can be traveled to visit an applicant at home.

6. Consideration of extenuating circumstances in the screening process. Owners may consider extenuating circumstances in evaluating information obtained during the screening process to assist in determining the acceptability of an applicant for tenancy. If the applicant is a person

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