Check Whether Section 504 Applies to Your Site

Section 504 of the Rehabilitation Act of 1973 bans disability-based discrimination in any program or activity that receives federal financial assistance from any federal agency (including HUD) or in any programs conducted by federal agencies. Many tax credit managers haven’t heard of this law and those who have heard of Section 504 may mistakenly believe that it doesn’t ever apply to tax credit sites. If Section 504 applies to your site and you don’t know it, you risk HUD investigations and possible penalties.

To help you avoid problems, we’ll tell you how to know whether Section 504 applies to your site. And we’ll tell you what this law requires if you must comply with it.

Who’s Considered Disabled Under Section 504?

Prospects and residents qualify as disabled under Section 504 if they have a physical or mental impairment that substantially limits one or more major life activities. The term “physical or mental impairment” may include conditions such as visual or hearing impairment, mobility impairment, HIV infection, mental retardation, drug addiction (except current illegal use of or addiction to drugs), or mental illness. The term “major life activity” may include breathing, caring for oneself, hearing, learning, performing manual tasks, seeing, speaking, walking, or working.

Because Section 504’s qualifications are essentially the same as those under the Fair Housing Act (FHA), prospects and residents whom you consider disabled under the FHA are also disabled under Section 504.

Which Sites Must Comply?

Section 504 applies to “recipients of federal assistance,” including tax credit and market-rate sites that get some federal assistance. Participation in the tax credit program alone doesn’t mean that a site gets federal assistance. But if your tax credit site is also financed under, say, HUD’s Community Development Block Grant (CDBG) or the Home Investment Partnership Program (HOME), Section 504 applies to your site. Section 504 applies to tax credit and market-rate sites that participate in project-based Section 8, Section 202, and those sites that receive direct funding through the Tax Credit Assistance Program (TCAP) or the LIHTC Exchange Program also must comply with Section 504 requirements. If you’re not sure whether your site gets federal financing, it is best to talk to the owner.

How to Comply

In some respects, you comply with Section 504 in the same way you comply with the FHA. But there are some key differences. If Section 504 applies to your site:

• Your site—not your households—must pay for reasonable accommodations and modifications that prospects and residents request in connection with a disability (unless you can show financial hardship);
• At least 5 percent of your units (or one unit, whichever is greater) generally must be accessible to residents with mobility impairments, and at least 2 percent of your units must be accessible to residents with hearing or vision impairments;
• You must furnish appropriate auxiliary aids needed to give disabled residents an equal opportunity to enjoy their housing; and
• You must choose at least one employee at your site to coordinate compliance with Section 504 (if your site has at least 15 employees).

If you determine that Section 504 applies to your site, talk to your attorney for a full rundown on its requirements to make sure you’re in compliance.