Freedom Mortgage in Mount Laurel, N.J., has agreed to pay $104,000 to settle claims that it discriminated against loan applicants with disabilities.
The agreement stems from a complaint filed by the Department of Housing and Urban Development, accusing the lender of violating consumer protections under the Fair Housing Act.
HUD said that Freedom Mortgage used a separate set of underwriting guidelines for loan applicants with disabilities.
"Applicants who are otherwise qualified for a home loan may not have additional requirements placed on them because of a disability," said Gustavo Velasquez, an assistant secretary at HUD, in a news release Wednesday.
Freedom Mortgage, the agency contended, required applicants with disability-related income to submit additional documentation, including doctors' notes or letters from the Social Security Administration, showing that their income would continue for three years.
In an emailed statement, Freedom Mortgage denied the charges, saying that its "underwriting processes are designed to facilitate opportunities to lend to applicants whose income consists of or includes disability income."
As part of the settlement, the lender is required to pay damages to 69 applicants, ranging from $1,000 to $5,000 each.
The lender also agreed to abolish its income verification process for disability income and provide employees with training on Fair Housing Act requirements.