WESTCHESTER COUNTY, N.Y. – Westchester County violated the terms of the Housing Settlement when County Executive Rob Astorino vetoed a bill banning discrimination against renters for using public assistance, such as Section 8 vouchers, to pay rent, the U.S. Court of Appeals for the Second Circuit decided Friday.

The decision upholds a judgment from the U.S. District Court.

Astorino vetoed a source-of-income bill passed by the County Board of Legislators in June 2010. A previous bill had been reintroduced from the 2009 legislative session. The 2010 bill removed court-ordered payments, inheritance, annuities, pensions and child and spousal support from the definition of income source. The bill also set a $50,000 penalty for discrimination and exempted co-op apartments and condominiums.

The Department of Housing and Urban Development contested that the county violated the terms of the settlement by not promoting the source-of-income legislation or including plans to overcome exclusionary zoning practices.

WHITE PLAINS, New York — A suburban county executive violated a fair-housing agreement by vetoing a measure he was obligated to support, a federal appeals court said Friday.

The decision by the 2nd U.S. Circuit Court of Appeals affirmed a district judge’s finding. It was another blow to Westchester County Executive Rob Astorino’s battle against how federal entities are interpreting the 2009 agreement.

Last week, the Department of Housing and Urban Development said Westchester would lose $7.4 million in grants unless the county ends its resistance to government orders.

Astorino issued a statement saying he was disappointed with Friday’s ruling.

“I will comply with the law and continue to take principled stands,” he said.

But HUD Deputy Secretary Maurice Jones praised the court’s decision.

“The court of appeals has very clearly stated that Westchester County must follow through on its commitments to fair housing opportunities,” said Jones.

In 2009, facing a likely loss in an anti-discrimination lawsuit, the county just north of New York City negotiated an agreement with the federal government designed to make Westchester’s government a force for fair housing.

The county agreed to build or acquire 750 units of affordable housing — mostly in white areas — and market them to non-whites in the region.

That program is ahead of schedule, the county says.

But the agreement also called for the county executive to “promote” legislation that would prohibit landlords from rejecting tenants who use government subsidies to help pay their rent.

When such a bill came before him in 2010, Astorino vetoed it. He said the previous county executive had fulfilled the obligation to promote it and the agreement didn’t bind him to the same requirement.

In Friday’s ruling, the court said Astorino was wrong on both counts and “the veto was wholly inconsistent” with his duty to promote it.

“We find that the county breached its duty,” the court said.

Housing prices in the nation surged 10.2 percent in February, but a large inventory of low priced foreclosures kept increases at more modest levels in Connecticut and Fairfield County.

CoreLogic, the California-based realty data firm, released a report Wednesday on national and local trends in housing prices.

“Home prices continued their march upward in February. Nationally, home prices improved at the best rate since mid-2006, marking a full year of annual increases and underscoring the ongoing strengthening of market fundamentals,” Anand Nallathambi, president and chief executive of CoreLogic, said in the report. “Continued home price appreciation will provide fuel needed to drive further recovery in the home purchase market.”

Nationally, home prices were higher when distressed properties were included in the figures, but in Connecticut, prices were dramatically lower when the foreclosures and short sales were included