I received a call recently regarding the rights of a faith-based organization operating an apartment community when HUD funding is present at the community. The issue is important enough that I believe other clients may benefit from a general review of the laws in this area.
24 CFR §5.109 is the governing section of the Code of Federal Regulations in this area. Faith-based organizations are eligible to participate in HUD programs and activities on the same basis as other organizations. No governmental entity administering HUD programs may discriminate against a group based on religious character or affiliation, of lack of religious character or affiliation.
A faith-based organization that participates in an HUD-funded program may continue to carry out its religious mission as long as direct federal financial assistance is not used to support or engage in activities that are clearly religious in nature. Religious organizations that receive direct federal funding may use space in its facilities to carry out activities under a HUD program without removing religious symbols from the space. However, if the organization carries out specific religious activities, the activities must be offered at a separate time or location from the programs or activities supported by federal financial assistance. Also, participation in religious activities must be voluntary for program beneficiaries. Faith-based organizations that carry out programs or activities with HUD financial assistance must give written notice to beneficiaries and prospective beneficiaries of the programs or activities and describe the protections available to them. If a beneficiary or prospective beneficiary objects to the religious character of the organization carrying out the programs, the organization must undertake reasonable efforts to refer the beneficiary or potential beneficiary to an alternative provider.
Faith-based organizations that operate HUD-assisted housing, and management companies working for such organizations, must be familiar with these requirements and be prepared to adhere to the federal requirements. Clearly, fair housing law should always be kept in mind when dealing with religious issues on the site. It is against the law to discriminate on the basis of religion. This includes having any practice, program, or policies that indicate a preference for one religion over another. For this reason, owners and managers should carefully review programs offered at properties and how community facilities are used.