Screening Housemates and Tenants for House Hacking

Screen a housemate, or a tenant in a small building you live in, against written criteria you apply to every applicant: an application, a credit and eviction report the applicant authorizes, income and landlord checks, and your house rules. The federal Fair Housing Act exempts your choice of tenant when you live in a building of up to four units, and a federal appeals court has held it does not cover choosing a roommate to share your unit. The building exemption does not cover your ads or what you say to applicants, it does not allow race discrimination, and states such as California and New York cover more owner-occupied rentals. If a screening report plays any part in a denial, federal credit reporting law requires a written or oral adverse action notice. For the house hacking strategy as a whole, see what is house hacking.

Start with written criteria and house rules

Write your standards down before you list the room or unit, give them to every applicant, and review applications in the order you receive them:

• Money: minimum income as a multiple of the rent, and the credit report items that lead to denial, such as unpaid rent in collections.
• Rental history: no eviction judgments within a set number of years, and a reference from a current or past landlord. In New York, Real Property Law section 227-f bars refusing to rent because an applicant was involved in a past or pending landlord-tenant case, and rejecting someone after checking court records creates a presumption that you did.
• House rules: no smoking, pet policy, overnight guest limits, quiet hours, and how shared spaces are cleaned.

House rules work as screening criteria because they describe the home, not the person, and you can state them in an ad. Note on each application which standard decided it. That record matters if you lose the exemption described below, or never had it under your state's law. The tenant screening process covers state limits on application fees and income multiples.

What the federal owner-occupant exemption covers

The Fair Housing Act bars refusing to rent, or offering worse terms, because of race, color, religion, sex, disability, familial status, or national origin. Under 42 U.S.C. section 3603(b)(2), the Act exempts rooms or units in a building with living quarters for no more than four families living independently, if the owner actually lives in one of them. This is often called the "Mrs. Murphy" exemption. It covers a room in your house, the other side of a duplex, or two units of a fourplex you live in.

For a roommate who shares your unit, the Ninth Circuit Court of Appeals held in 2012, in Fair Housing Council of San Fernando Valley v. Roommate.com, that the Act does not reach roommate selection at all, citing the privacy and safety interests of people who share a home, and it found no violation in roommate ads that stated preferences. That ruling binds federal courts only in the western states the Ninth Circuit covers, including California, Washington, and Arizona. Elsewhere, treat a roommate ad as covered by the ad rule below, and state law can cover it everywhere.

Three federal limits apply even when the building exemption covers you:

1. Ads and statements. The exemption excludes the Act's ban on any notice, statement, or advertisement that indicates a preference based on a protected class. "No kids," "Christian household," or telling an applicant you would rather not rent to a family with children are violations, in a listing or out loud.
2. Race. A separate 1866 law, 42 U.S.C. section 1982, gives all citizens the same right to lease property "as is enjoyed by white citizens," and it has no small-landlord exemption.
3. State and local law. The federal exemption does not override a state or city law that covers you.

State and local laws that narrow or remove the exemption

Check your state civil rights agency before you rely on the federal rule. Three examples:

Criminal history checks have their own state and local limits with their own exemptions. New Jersey's Fair Chance in Housing Act does not cover owner-occupied buildings of four or fewer units. New York City's Fair Chance Housing Law, in effect since January 1, 2025, exempts housing with two or fewer rooms or units when the owner or the owner's family lives in one of them, so a three-unit building you live in is covered: you may run a criminal check there only after a written conditional offer and the city's Fair Chance Notice of Rights, and before withdrawing the offer you must share the records, allow 5 business days for a response, and give written reasons.

Credit and background checks: consent and notices

Order reports through a tenant screening company, only on people who have applied, and get each applicant's signed authorization with the application. The Fair Credit Reporting Act (FCRA) rules on how you use the report apply whether or not you are exempt from fair housing law. The FTC says you must give an adverse action notice when you deny an applicant, require a cosigner, or require a larger deposit than another applicant would pay, based even partly on a consumer report. The notice must include:

1. The screening company's name, address, and phone number.
2. A statement that the company did not make the decision and cannot tell the applicant why it was made.
3. The applicant's right to a free copy of the report if requested within 60 days, and to dispute errors.

You can give the notice orally, in writing, or electronically, though the FTC calls written notice the best practice. If you used a credit score, also give the score, its range, its source and date, and the key factors that lowered it, in writing or electronically. A service that calls past landlords for you produces a consumer report too, so the same notice rules apply, and if it asks about character or lifestyle, extra written disclosures are due when you order it; ask the service what it sends. When you no longer need a report, dispose of it so it cannot be read or reconstructed, such as by shredding paper and securely erasing electronic files.

Compatibility questions you can ask

Ask about how someone will live in the space, and ask every applicant the same questions:

A no-pets rule has a disability exception. Where the Fair Housing Act covers your rental, you must make reasonable accommodations in rules when needed for a person with a disability to use the housing, which can mean allowing an assistance animal. State law can require the same when federal law does not: California treats assistance animals as not pets and applies its rule to rentals such as an owner-occupied duplex.

Make the decision and keep the file

Compare each applicant to your written criteria, pick the first who meets them, and record the reason for each denial. Send any adverse action notice, and keep the application, report, and your notes in one file. Put the terms in a written agreement before move-in: renting spare rooms lists what a room rental agreement covers, and house hacking a duplex covers leases for the other unit.