The opinion
GIBBONS, Circuit Judge,
dissenting:
The plaintiffs challenge a provision of the Administrative Plan of the Housing Authority of the City of York for the program it administers under Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1437f, which denies participation in the program to persons who owe debts to the Authority arising out of prior occupancy in *443 its own projects. Unlike the provisions of the law governing publicly owned housing, Section 8 provides for subsidizing, with federal funds, rentals by private sector owners. The plaintiffs contend that the Authority’s policy advances none of the policies of Section 8, and thus is inconsistent with federal law. The majority opinion rejects this contention, relying on 42 U.S.C. § 1437 , which vests in local agencies the maximum amount of responsibility on the administration of their housing programs, and on 24 C.F.R. § 882.209 (f) (1981), which authorizes local agencies to determine eligibility “for any . . . reason.” Those provisions, however, cannot reasonably be construed to permit a local housing authority to adopt participant selection criteria totally unrelated to the purposes of the Section 8 program. The criterion which the Housing Authority of the City of York has selected is just that.
It is clear that the policy has nothing to do with the likely performance of the tenant as a rent payer in the private housing market. The prospective tenant can have a history of perpetual delinquency on rent and on every other obligation, and still become eligible by paying off a single creditor, the Authority. A tenant in privately owned substandard housing may owe his landlord thousands of dollars and remain eligible. Indeed Chapter 4 1 (3) of the Handbook for the Section 8 Existing Housing Program provides that “PHAs must not establish selection criteria based on the applicant’s expected behavior as a tenant.” The creditworthiness of the tenant is a matter solely for the judgment of the private sector owner. 42 U.S.C. § 1437f(d)(l)(A). Thus the challenged policy cannot be justified as a predictor of good tenant behavior. It is purely and simply a collection device, favoring a single creditor. There is nothing in Section 8 or its legislative history suggesting that debt collection was one of the purposes Congress had in mind. The authority’s policy is no more rationally related to the purposes of Section 8 than would be a policy requiring applicants to pay off delinquent retail installment debts, or to join the YMCA. I agree with Judge Wiseman:
Defendants’ policy of excluding persons alleged to have prior debts to MDHA from the Section 8 program 8 in effect constitutes an unauthorized collection practice, precluding from the program people who have had trouble paying rent, who are the very persons whom the Section 8 program was intended to help. By so doing, the defendants’ policy violates the stated purpose of the statutes, regulations, and legislative history creating the program.
Ferguson v. Metropolitan Development and Housing Agency, 485 F.Supp. 517, 524 (M.D. Tenn. 1980). The appellants make the point that because of the attractive features of the limited Section 8 program the Authority’s policy is a potent collection weapon, permitting it to coerce both payments of disputed amounts and payments in preference to other creditors. Congress never intended that the Section 8 program be used for such a purpose. I would reverse.
. The present policy is stated as:
“Former tenants who owe the MDHA a balance from a prior occupancy will not be considered for admission until the account is paid in full____” ...