13.2.2 Exempted Dwellings

Certain dwellings are exempt from FHA coverage. The most common exemption is an owner’s sale or rental of a single-family home, provided that the owner does not own more than 3 single-family homes.1  Also, the exemption has numerous exceptions,2  including that a four-plex is not a ‘‘single family home.”3  Even if the owner is exempt, the owner’s broker is not if the broker’s conduct violates the FHA.

Other exempt dwellings include owner-occupied buildings with no more than 4 units,4  religious organizations’ noncommercial dwellings, and private clubs’ incidental noncommercial lodgings. Housing for “older persons” is exempt from the FHA for purposes of the prohibition against discrimination on the basis of familial status, but not on other grounds.5

A defendant must plead and prove an FHA exemption as an affirmative defense.6  Exemptions are strictly construed.7  A landlord exempted under § 3603 may still be liable for racial discrimination under 42 U.S.C. §§ 1981–1982.

• 142 U.S.C. § 3603(b)(1). The exemption does not apply to discriminatory advertising. 42 U.S.C. §§ 3603(b), 3604(c).
• 2See, e.g., Dillon v. AFBIC Dev., 597 F.2d 556, 561 (5th Cir. 1979).
• 3Lincoln v. Case, 340 F.3d 283 (5th Cir. 2003).
• 442 U.S.C. § 3603(b)(2).
• 542 U.S.C. § 3607(b)(2)–(3).
• 6United States v. Columbus Country Club, 915 F. 2d 877, 885 (3d Cir. 1990).
• 7Singleton v. Gendason, 545 F. 2d 1224, 1227 (9th Cir. 1976).