Under New York Human Rights Law, which of the following best describes how 'lawful source of income' protections apply to a homebuyer whose income consists of disability payments and unemployment benefits?

Correct Answer

C) Lenders may not disqualify an applicant solely because income derives from a lawful source, though they may still apply standard underwriting criteria for income stability and sufficiency

New York Human Rights Law (Executive Law §296) prohibits discrimination based on lawful source of income, meaning a lender cannot reject an applicant solely because income comes from disability payments or unemployment benefits. However, this protection does not eliminate legitimate underwriting standards: lenders may still evaluate whether income is stable, sufficient, and likely to continue under standard creditworthiness criteria. The distinction is between rejecting an applicant because of the source of income versus evaluating the reliability and adequacy of that income under neutral underwriting guidelines.