What is the Holden Act?

The Holden Act is the Housing Financial Discrimination Act of 1977, codified at California Health and Safety Code §35800 and following. It is California's fair-lending law, prohibiting discrimination in home financing — both redlining based on neighborhood characteristics and discrimination based on an applicant's protected characteristics. It covers financing to purchase, construct, rehabilitate, improve, or refinance one-to-four-unit owner-occupied residential property and is enforced by the Department of Financial Protection and Innovation.

Redlining is a lender refusing to make mortgage loans in a neighborhood, or offering worse terms there, because of the area's characteristics rather than the merits of the individual loan. Health and Safety Code §35810 prohibits it: a lender may not discriminate in financing because of conditions, characteristics, or trends in the neighborhood surrounding the housing, unless it can show that doing so is necessary to avoid an unsafe and unsound business practice.

What is the Fair Lending Notice?

The Fair Lending Notice is a disclosure a lender must give an applicant, under Health and Safety Code §35830, when it receives a written loan application secured by California residential property. It states that discrimination in lending is illegal and tells the applicant where to file a complaint. Lenders also post it conspicuously for public inspection. It is the Holden Act's front-line way of making applicants aware of their rights.

How is the Holden Act different from the Fair Employment and Housing Act?

The Holden Act regulates discrimination in home financing — lending and appraisal decisions. The Fair Employment and Housing Act governs discrimination in the sale, rental, and terms of housing accommodations themselves. They address different stages: the Fair Employment and Housing Act reaches whether you can rent or buy a home, while the Holden Act reaches whether you can get the loan to finance it. The Unruh Civil Rights Act, in turn, covers business establishments generally.

Who enforces the Holden Act?

The Holden Act is administered by the Department of Financial Protection and Innovation, which monitors and investigates the lending patterns and practices of financial institutions and receives applicant complaints. An applicant who believes a lender discriminated in violation of the Act can file a complaint for investigation, and lenders are subject to ongoing monitoring for compliance.

The Holden Act: California Fair-Lending Law (35800)

TL;DR

The Holden Act — formally the Housing Financial Discrimination Act of 1977, Health and Safety Code §35800 and following — is California's fair-lending law. It targets discrimination in home financing, and its central purpose is to stop redlining: the practice of denying or varying the terms of a mortgage based on the character of the neighborhood rather than the creditworthiness of the applicant or the merits of the property. Under §35810, a financial institution may not discriminate in providing mortgage financing because of conditions, characteristics, or trends in the neighborhood surrounding the housing — unless it can show that considering those conditions is necessary to avoid an unsafe and unsound business practice. Under §35811, a lender also may not discriminate based on any basis incorporated from Government Code §12955 — including race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, and genetic information. The Act covers financing to purchase, construct, rehabilitate, improve, or refinance one-to-four-unit owner-occupied housing. Lenders must give applicants a Fair Lending Notice when they submit a written loan application (§35830). The Holden Act is enforced by the Department of Financial Protection and Innovation and is distinct from California's other fair-housing laws: it regulates lending and appraisal decisions, whereas the Fair Employment and Housing Act and the Unruh Civil Rights Act reach housing accommodations and business services more broadly.

What the Holden Act is

The Housing Financial Discrimination Act of 1977, universally called the Holden Act, is California's principal fair-lending statute, codified at Health and Safety Code §35800 and following. Where most fair-housing laws focus on the sale or rental of housing, the Holden Act focuses one step earlier in the process — on the financing that makes buying or improving a home possible.

Its premise is that an efficient, fair housing market depends on financing decisions being made on the merits: the creditworthiness of the borrower and the value of the specific property, not assumptions about the neighborhood or the identity of the applicant. When lenders deny financing based on where a property sits, they can starve whole communities of the capital needed to sustain property values, which harms residents and perpetuates segregation. The Act is aimed squarely at breaking that cycle.

Redlining: the core target

The practice the Holden Act was written to stop is redlining — a lender drawing a metaphorical red line around a neighborhood and refusing to lend there, or lending only on worse terms, because of the area's characteristics rather than the individual loan's merits. Health and Safety Code §35810 prohibits a financial institution from discriminating in the availability or terms of financial assistance because of conditions, characteristics, or trends in the neighborhood or geographic area surrounding the housing.

The statute includes a narrow safety valve: a lender may consider such neighborhood conditions in a particular case only if it can demonstrate that doing so is necessary to avoid an unsafe and unsound business practice. That is a demanding standard, and it does not permit blanket neighborhood-based policies. Section 35810 also preserves special loan programs designed to promote housing opportunities in ethnic-minority or low-income neighborhoods, so affirmative programs to increase lending in underserved areas are protected rather than prohibited. For how neighborhood-based property information reaches buyers through a different disclosure channel, see our guide to the Fair Employment and Housing Act.

Prohibited bases of discrimination

Alongside the anti-redlining rule, the Holden Act prohibits discrimination based on the applicant's own protected characteristics. Health and Safety Code §35811 bars a lender from discriminating in financial assistance based on any basis listed in Government Code §12955(a) or (d) — including race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, and genetic information.

This applicant-focused prohibition works together with the neighborhood-focused prohibition in §35810. One stops a lender from discriminating against a person; the other stops a lender from discriminating against a place. Both are needed, because historically redlining accomplished through geography what direct discrimination accomplished through the applicant — denying credit to the same communities by a different route. The Act closes both paths. For the parallel prohibition on discrimination in the provision of business services and accommodations generally, see our guide to the Unruh Civil Rights Act.

Provision	What it prohibits
Health and Safety Code §35810	Discrimination based on neighborhood conditions (redlining)
Health and Safety Code §35811	Discrimination based on the bases incorporated from Gov. Code §12955, including race, color, religion, sex/gender, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, and genetic information
Health and Safety Code §35830	Duty to give a Fair Lending Notice on written applications

What the Act covers and the Fair Lending Notice

The Holden Act applies to financial assistance for purchasing, constructing, rehabilitating, improving, or refinancing housing accommodations, focused on one-to-four-unit owner-occupied residential property. This scope centers the law on ordinary home financing — the mortgages, home-improvement loans, and refinances that most households rely on — rather than large commercial lending.

To make the protections visible, §35830 requires a lender to give the applicant a Fair Lending Notice at the time it receives a written loan application secured by California residential property. The notice informs applicants that discrimination in lending is illegal and tells them where to direct a complaint. Lenders also post the notice conspicuously for public inspection. This disclosure duty is the Holden Act's front-line enforcement mechanism: it puts every applicant on notice of the right and the remedy at the moment they apply.

Enforcement and how the Holden Act differs from other fair-housing laws

The Holden Act is administered by the Department of Financial Protection and Innovation, which monitors and investigates the lending patterns and practices of financial institutions for compliance and provides a channel for applicant complaints. An applicant who believes a lender discriminated can file a complaint for investigation.

What sets the Holden Act apart from California's other civil-rights statutes is its subject: it regulates lending and appraisal decisions in home financing, not housing accommodations or general business services. The Fair Employment and Housing Act governs discrimination in the sale, rental, and terms of housing itself; the Unruh Civil Rights Act governs discrimination by business establishments broadly. The Holden Act fills the financing gap between them, ensuring that the credit needed to obtain housing is available on nondiscriminatory terms. For the licensing and disclosure framework that governs mortgage brokers arranging that credit, see our guide to the Mortgage Loan Disclosure Statement.

Frequently Asked Questions

What is the Holden Act?: The Holden Act is the Housing Financial Discrimination Act of 1977, codified at California Health and Safety Code §35800 and following. It is California's fair-lending law, prohibiting discrimination in home financing — both redlining based on neighborhood characteristics and discrimination based on an applicant's protected characteristics. It covers financing to purchase, construct, rehabilitate, improve, or refinance one-to-four-unit owner-occupied residential property and is enforced by the Department of Financial Protection and Innovation.
What is redlining?: Redlining is a lender refusing to make mortgage loans in a neighborhood, or offering worse terms there, because of the area's characteristics rather than the merits of the individual loan. Health and Safety Code §35810 prohibits it: a lender may not discriminate in financing because of conditions, characteristics, or trends in the neighborhood surrounding the housing, unless it can show that doing so is necessary to avoid an unsafe and unsound business practice.
What personal characteristics does the Holden Act protect?: Under Health and Safety Code §35811, a lender may not discriminate in financial assistance based on any basis incorporated from Government Code §12955(a) or (d) — including race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, and genetic information. This applicant-focused protection works alongside the anti-redlining rule in §35810, so the Act prohibits discrimination against both a person and a place.
What is the Fair Lending Notice?: The Fair Lending Notice is a disclosure a lender must give an applicant, under Health and Safety Code §35830, when it receives a written loan application secured by California residential property. It states that discrimination in lending is illegal and tells the applicant where to file a complaint. Lenders also post it conspicuously for public inspection. It is the Holden Act's front-line way of making applicants aware of their rights.
How is the Holden Act different from the Fair Employment and Housing Act?: The Holden Act regulates discrimination in home financing — lending and appraisal decisions. The Fair Employment and Housing Act governs discrimination in the sale, rental, and terms of housing accommodations themselves. They address different stages: the Fair Employment and Housing Act reaches whether you can rent or buy a home, while the Holden Act reaches whether you can get the loan to finance it. The Unruh Civil Rights Act, in turn, covers business establishments generally.
Who enforces the Holden Act?: The Holden Act is administered by the Department of Financial Protection and Innovation, which monitors and investigates the lending patterns and practices of financial institutions and receives applicant complaints. An applicant who believes a lender discriminated in violation of the Act can file a complaint for investigation, and lenders are subject to ongoing monitoring for compliance.

Bottom Line

The Holden Act — the Housing Financial Discrimination Act of 1977, Health and Safety Code §35800 and following — is California's fair-lending law, aimed at stopping redlining in home financing. Section 35810 prohibits discrimination in the availability or terms of financing because of neighborhood conditions, unless the lender shows it is necessary to avoid an unsafe and unsound business practice, while preserving special programs that promote lending in minority or low-income areas. Section 35811 prohibits discrimination based on any basis incorporated from Government Code §12955, including race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status, and genetic information. The Act covers financing for one-to-four-unit owner-occupied residential property and requires a Fair Lending Notice on written applications under §35830. It is enforced by the Department of Financial Protection and Innovation, and it is distinct from the Fair Employment and Housing Act and the Unruh Civil Rights Act because it regulates lending and appraisal rather than housing accommodations or business services generally. For related California topics, see our guides to the Fair Employment and Housing Act, the Unruh Civil Rights Act, and the Mortgage Loan Disclosure Statement.

Source: Cal. Health & Safety Code §35810 (FindLaw) · California Health & Safety Code §35800 et seq. (official) · DFPI — Housing Financial Discrimination Act Fair Lending Notice