On January 14, 2026, The U.S. Department of Housing and Urban Development (HUD) issued a proposed rule that would substantially change the agency’s interpretation of disparate impact liability under the federal Fair Housing Act (FHA).
Consistent with President Trump’s Executive Order 14281 titled, “Restoring Equality of Opportunity and Meritocracy,” which ordered federal agencies to eliminate disparate impact liability in all contexts to the greatest extent possible, HUD is proposing to revise 24 CFR 100.5(b) and remove and reserve 24 CFR part 100, subpart G, which contains § 100.500.
This proposed rule would:
[R]emove the second sentence of § 100.5(b), which states that illustrations of unlawful housing discrimination in 24 CFR part 100 may be established by a practice's discriminatory effect, even if not motivated by discriminatory intent, consistent with the standards outlined in § 100.500. Section 100.500 states that liability may be established under the Fair Housing Act based on a housing practice's discriminatory effect, as defined in paragraph (a) of § 100.500, even if the practice was not motivated by discriminatory intent; that the practice may still be lawful if supported by a legally sufficient justification, as defined in paragraph (b); and that the paragraph (c) lays out the burdens of proof for establishing a violation under subpart G of part 100 of title 24 of the Code of Federal Regulations.
HUD argues in the publication that “[i]t is appropriate for courts, not a Federal agency, to make determinations related to the interpretation of disparate impact liability under the Fair Housing Act.” The rule is now open to public comment until February 13.
This follows the release of HUD’s September 16, 2025, memorandum that detailed immediate changes to the agency’s enforcement priorities. The memo instructs the agency’s staff to focus all its resources on cases with the strongest evidence of intentional discrimination and rescinds all guidance that is not in alignment with this directive. For a more detailed breakdown of HUD’s policy changes and enforcement of disparate impact discrimination, see NAA’s deep dive member resource.
The National Apartment Association (NAA), along with the National Multifamily Housing Council (NMHC), asked the Trump Administration to revise HUD’s disparate impact rulemaking to align with the U.S. Supreme Court and other legal action and include important safeguards for housing providers against litigation stemming from legitimate, nondiscriminatory policies. HUD should also rescind and revise all guidance and memoranda that rely on the disparate impact rule.
The apartment industry strongly supports fair housing laws, but we have long-raised concerns that an overly expansive view of disparate impact theory could create liability for basic housing development and operational practices.
We appreciate HUD’s commitment to reducing regulations and thereby reducing the cost of rental housing. NAA intends to provide comments in support of the proposed rule and looks forward to continued collaboration with HUD.
Ben Harrold is NAA's Senior Manager, Public Policy.