Source of Income is a phrase used to describe the source of money that a resident or their household uses to pay their rent. For example, the resident or household’s income could be from working a job, personal savings, retirement income, or government benefits (social security payments, housing vouchers, etc.). 

In Indiana, which prohibits municipalities (cities and towns) from passing their own laws regulating landlord-tenant law, there are no prohibitions or restrictions against considering the source of a prospective resident’s income when determining whether to lease a dwelling. In many states and municipalities across the United States, property owners are prohibited from considering a resident’s source of income in leasing decisions.

This issue most often arises when a prospective resident desires to use housing vouchers to pay their rent. Property owners who accept housing vouchers must comply with additional federal rules and regulations that are not applicable to other residents, including regular inspections of the residence by a HUD-certified inspector.

While most properties can comply with the HUD standards required of those serving residents with housing vouchers, the additional rules, regulations, and inspections are enough to deter some property owners from participating.  

Property owners are free to communicate to residents that the property does not accept housing vouchers under state law.  

Property owners should be aware that despite Indiana’s laws, U.S. Housing and Urban Development has passed rules dealing with disparate impact, which allows challenges to state laws that are neutral on their face (do not appear discriminatory at first glance), but in application result in discriminatory impacts on protected classes of individuals (race, religion, gender, etc.). As of publication, HUD has not challenged states’ statutes protecting a property owners’ right to decline acceptance of housing vouchers; however, this risk does exist.