Fair Lending has changed significantly in the past few years. What might have been OK 20 years ago (or even 2 years ago) is raising the ire of the DOJ. From the Interagency Guidelines - redlining may end up as a side comment, it may be riskier if they considered it Disparate Impact.
Disparate Impact
When a lender applies a racially or otherwise neutral policy or practice equally to all credit applicants, but the policy or practice disproportionately excludes or burdens certain persons on a prohibited basis, the policy or practice is described as having a “disparate impact.”
Example: A lender’s policy is not to extend loans for single family residences for less
than $60,000.00. This policy has been in effect for ten years. This minimum loan amount
policy is shown to disproportionately exclude potential minority applicants from
consideration because of their income levels or the value of the houses in the areas in
which they live.
The fact that a policy or practice creates a disparity on a prohibited basis is not alone proof of a violation. When an Agency finds that a lender’s policy or practice has a disparate impact, the next step is to seek to determine whether the policy or practice is justified by “business necessity.” The justification must be manifest and may not be hypothetical or speculative. Factors that may be relevant to the justification could include cost and profitability. Even if a policy or practice that has a disparate impact on a prohibited basis can be justified by business necessity, it still may be found to be in violation if an alternative policy or practice could serve the same purpose with less discriminatory effect. Finally, evidence of discriminatory intent is not necessary to establish that a lender's adoption or implementation of a policy or practice that has a disparate impact is in violation of the FHAct or ECOA.
Look at it as a business decision and document any alternatives. Consideration might also be given to guidance from your regulator - they will be examining your decision.
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Integrity. With it, nothing else matters. Without it, nothing else matters.