# Scope.
**AGENCY:**
Office of the Assistant Secretary for Fair Housing and Equal Opportunity, Department of Housing and Urban Development (HUD).
**ACTION:**
Proposed rule.
**SUMMARY:**
The Fair Housing Act prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities. Since 2013, HUD has issued three final rules for determining whether a given practice has an unjustified discriminatory effect under the Fair Housing Act, even where practices were not motivated by discriminatory intent. These rules formalized legal tests that were not explicit in statute and imposed a presumption of unlawful discrimination when any variance in outcomes exists among protected classes, even without a showing of a facially discriminatory policy or discriminatory intent. Through this rulemaking, HUD is proposing to remove its discriminatory effects regulations and leaving to courts questions related to interpretations of disparate impact liability under the Fair Housing Act.
**DATES:**
*Comment Due Date:* February 13, 2026.
**ADDRESSES:**
Interested persons are invited to submit comments regarding this proposed rule. All submissions must refer to the docket number and title. There are two methods for submitting public comments.
1. *Electronic Submission of Comments.* Interested persons may submit comments electronically through the Federal eRulemaking Portal at *https://www.regulations.gov.*
2. *Submission of Comments by Mail.* Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW, Room 10276, Washington, DC 20410-0500.
In accordance with 5 U.S.C. 553(b)(4), a summary of this proposed rule may be found at *www.regulations.gov.*
**FOR FURTHER INFORMATION CONTACT:**
Scott Knittle, Principal Deputy General Counsel, U.S. Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; telephone number (202) 402-2244 (this is not a toll-free number). HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit *https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.*
**SUPPLEMENTARY INFORMATION:**
**I. Background**
Title VIII of the Civil Rights Act of 1968, as amended (“the Fair Housing Act” or “the Act”), prohibits discrimination in the sale, rental, or financing of dwellings and in other housing-related activities on the basis of race, color, religion, sex, disability, familial status, or national origin. [^1] On February 15, 2013, at 78 FR 11460, HUD published a final rule entitled “Implementation of the Fair Housing Act's Discriminatory Effects Standard” (“the 2013 rule”). The 2013 rule established regulations in 24 CFR part 100 to formalize an interpretation that discriminatory effect, or disparate impact, liability is cognizable under the Act. It also codified a burden-shifting framework onto the defendant for analyzing disparate impact claims, relying in part on existing case law under the Fair Housing Act, decisions by HUD's administrative law judges, and Title VII of the Civil Rights Act of 1964 (which relates to employment discrimination). [^2]
[^1] 42 U.S.C. 3601-3619, 3631. This preamble uses the term “disability” to refer to what the Act and its implementing regulations term a “handicap.” *See, e.g., Hunt* v. *Aimco Props., L.P.,* 814 F.3d 1213, n.1 (11th Cir. 2016) (noting the term disability is generally preferred over handicap).
[^2]*See* 24 CFR 100.500(c). In 2016, HUD also published a notice that supplemented its responses to certain comments made by the insurance industry during the rulemaking. *See* “Application of the Fair Housing Act's Discriminatory Effects Standard to Insurance,” 81 FR 69012 (Oct. 5, 2016).
In 2015, the Supreme Court held that disparate impact claims are cognizable under the Fair Housing Act in *Texas Department of Housing and Community Affairs* v. *Inclusive Communities Project, Inc.,* ( *Inclusive Communities* ). [^3] In this case, the Court discussed the standards for, and constitutional questions and necessary limitations regarding, disparate impact claims. On June 20, 2018, at 83 FR 28560, HUD published an advance notice of proposed rulemaking (“ANPRM”) inviting public comment on “what changes, if any” to the 2013 rule were necessary as a result of *Inclusive Communities.* Following the ANPRM and a subsequent proposed rule published on August 19, 2019, at 84 FR 42854, HUD published a final rule titled “HUD's Implementation of the Fair Housing Act's Disparate Impact Standard” on September 24, 2020 (“the 2020 rule”) at 84 FR 42854. The 2020 rule amended HUD's disparate impact regulations to implement the Supreme Court's decision in *Inclusive Communities* and to provide clarification regarding the application of the standard to State laws governing the business of insurance.
[^3] 576 U.S. 519, 519, 532-35 (2015).
Prior to the effective date of the 2020 Rule, the U.S. District Court for the District of Massachusetts in *Massachusetts Fair Housing Ctr.* v. *HUD* issued a preliminary injunction staying the implementation and postponing the effective date of the 2020 Rule. [^4]
[^4]*Mass. Fair Hous. Ctr.* v. *United States HUD,* 496 F. Supp. 3d 600, 611 (D. Mass. Oct. 25, 2020).
Pursuant to a Presidential Memorandum issued on January 26, 2021, at 86 FR 7487, HUD published a proposed rule at 86 FR 33590 to reinstate the 2013 rule, followed by a final rule titled “Reinstatement of HUD's Discriminatory Effects Standard” on March 31, 2023 (“the 2023 rule”) at 88 FR 19450.
**II. Justification for Rulemaking**
Several factors have prompted HUD to reconsider its discriminatory effects regulations. On April 23, 2025, the President issued Executive Order 14281 titled “Restoring Equality of Opportunity and Meritocracy” (“E.O. 14281”). [^5] The Executive Order states that equal treatment under the law is a “bedrock principle of the United States” which “guarantees equality of opportunity, not outcomes.” [^6] The Order asserts that disparate impact liability “endangers this foundational principle” by creating a “near insurmountable presumption of discrimination” when there are any differences in outcomes, “even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.” [^7] As such, the Order established that “it is the policy of the United States to eliminate the use of disparate-impact liability in all contexts to the maximum degree possible to avoid violating the Constitution, Federal civil rights laws, and basic American ideals.” [^8]
[^5] Executive Order 14281 was published in the *Federal Register* at 90 FR 17537 on April 28, 2025
[^6]*Id.*
[^7]*Id.*
[^8]*Id.*
E.O. 14281 instructs all federal agencies including HUD to, in coordination with the Attorney General, review existing regulations and rules that impose disparate impact liability and consider amendment or repeal of these regulations as appropriate under applicable law. Consistent with this, HUD has reviewed its disparate impact regulations and related prior rulemakings and determined they are unnecessary. HUD's prior assertion, that its disparate impact regulations provided clarity and predictability for all parties engaged in housing transactions (78 FR 11460), is diminished by the facts that case law continues to develop and HUD's regulation does not provide an up-to-date picture of the legal landscape. Furthermore, according to the Supreme Court's decision in *Loper Bright Enterprises* v. *Raimondo* (“ *Loper Bright”* ), [^9] federal agency interpretations of statutes and agency actions that rely on them do not receive any judicial deference. The reviewing court itself must determine the best interpretation of a statute and then assess whether the challenged agency action falls within the scope of that interpretation. [^10] A reviewing court is free to consider, or not, an agency's interpretation, and in any case the court may not simply defer to the agency's interpretations where the court finds the underlying statute to be ambiguous. [^11] As a result, HUD's prior disparate impact rulemakings, HUD's interpretation of the Fair Housing Act, and the codification of that interpretation in regulations, do not carry deferential weight. A reviewing court may wholly reject HUD's claims in prior rulemakings that the regulations provide greater clarity and predictability and may vacate or set aside HUD's rules. [^12] It is appropriate for courts, not a Federal agency, to make determinations related to the interpretation of disparate impact liability under the Fair Housing Act. Additionally, consistent with the current regulatory reform efforts and in accordance with Executive Order 14192 of January 31, 2025 (“Unleashing Prosperity Through Deregulation”), and Executive Order 14219 of February 19, 2025 (“Ensuring Lawful Governance and Implementing the President's `Department of Government Efficiency' Deregulatory Initiative”), HUD is undertaking a comprehensive review of its regulations to reduce unnecessary regulatory burdens, enhance the effectiveness of those regulations that are necessary, and promote principles underlying the rule of law. Removing HUD's disparate impact regulations is consistent with the principles of E.O. 14281 and regulatory reform efforts.
[^9] 603 U.S. 369 (2024) (hereinafter “ *Loper Bright* ”).
[^10]*Id.* at 395, 412-13.
[^11]*See id.* at 413.
[^12]*E.g., Env't Def. Fund* v. *U.S. Env't Prot. Agency,* 124 F.4th 1 (D.C. Cir. 2024) (final rule determined unlawful and parts of it vacated); *U.S. Sugar Corp.* v. *Env't Prot. Agency,* 113 F.4th 984 (D.C. Cir. 2024) (per curiam) (final rule set aside in part).
**III. This Proposed Rule**
Therefore, through this rulemaking, HUD is proposing to revise 24 CFR 100.5(b) and remove and reserve 24 CFR part 100, subpart G, which contains § 100.500. HUD is proposing to remove 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.
**IV. Justification for Shortened Comment Period**
For HUD rules issued for public comment, it is HUD's policy to afford the public “not less than sixty days for submission of comments” (24 CFR 10.1). In cases in which HUD determines that a shorter public comment period may be appropriate, it is also HUD's policy to provide an explanation of why the public comment period has been abbreviated.
This rule is a general statement of HUD's policy regarding liability under the Fair Housing Act. Previously, § 100.500 laid out HUD's policy regarding its interpretation and enforcement of discriminatory effects liability. HUD's general statement of policy now is that this matter is best left to the courts. This document does not change any requirements or affect any rights or obligations.
Additionally, HUD has thoroughly solicited and reviewed public comments on the relevant topics and issues concerning disparate impact liability under the Fair Housing Act and related proposals for HUD's discriminatory effects regulations. In 2011, HUD published a proposed rule that preceded HUD's 2013 rule, and the 2011 proposed rule generated, and HUD reviewed, 96 public comments submitted by individuals, fair housing and legal aid organizations, state and local fair housing agencies, Attorneys General from several States, state housing finance agencies, public housing agencies, public housing trade associations, insurance companies, mortgage lenders, credit unions, banking trade associations, real estate agents, and law firms. In 2019, HUD published a proposed rule that preceded HUD's 2020 rule, and that 2019 proposed rule generated, and HUD reviewed, approximately 45,758 comments from a similarly wide variety of individuals and entities. In 2021, HUD published another proposed rule to reinstate HUD's 2013 rule. Prior to publishing this proposed rule, HUD once again reviewed the public comments received on the 2019 proposed rule in addition to HUD's responses to those comments, legal precedent, and other relevant materials. The 2021 proposed rule then generated another 10,113 public comments submitted by a wide variety of individuals and entities, which HUD reviewed prior to publishing the 2023 final rule. Public comments covered a vast array of topics and issues, and many comments raised legal concerns including, for example, relevant court opinions, State and local law concerns, and interpretations of underlying legal authorities.
Given that this rulemaking does not change any requirements or affect any rights or obligations, and given the volume of public comments already submitted, the scope of issues and topics raised by those comments, and HUD's thorough consideration of those comments and other relevant materials over the course of several rulemakings, HUD has determined that it is in the public interest to remove HUD's disparate impact regulations as expeditiously as possible. As such, while HUD seeks and values input in the form of public comments, HUD has determined that a shortened public comment period is justified. In this regard, HUD notes that interested members of the public are familiar with these regulations and should be able to respond effectively within the 30-day period.
**V. Findings and Certifications**
**Regulatory Review—Executive Orders 12866 and 13563**
Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made regarding whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget in accordance with the requirements of the order. This proposed rule was determined to be a significant regulatory action under section 3(f) of Executive Order 12866, but not economically significant.
Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. As previously discussed, this proposed rule removes unnecessary regulations and is consistent with Executive Order 13563.
**Executive Order 14192, Regulatory Costs**
Executive Order 14192, entitled “Unleashing Prosperity Through Deregulation,” was issued on January 31, 2025. Section 3(c) of Executive Order 14192 requires that any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations. This rule removes existing regulations and will impose no regulatory costs.
**Regulatory Flexibility Act**
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 *et seq.* ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This rule simply removes regulations that interpret legal standards. As such, there is no change in burden for those involved in a challenged practice. Accordingly, the undersigned certifies that the rule will not have a significant economic impact on a substantial number of small entities.
**Environmental Impact**
This proposed rule is a policy document that sets out nondiscrimination standards. Accordingly, under 24 CFR 50.19(c)(3), this rule is categorically excluded from environmental review under the National Environmental Policy Act (42 U.S.C. 4321).
**Federalism—Executive Order 13132**
Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has Federalism implications if the rule either: (i) imposes substantial direct compliance costs on State and local governments and is not required by statute, or (ii) preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This proposed rule does not have Federalism implications and does not impose substantial direct compliance costs on State and local governments or preempt State law within the meaning of the Executive Order.
**Unfunded Mandates Reform Act**
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments, and on the private sector. This proposed rule does not impose any Federal mandates on any State, local, or Tribal governments, or on the private sector, within the meaning of the UMRA.
**List of Subjects in 24 CFR Part 100**
Aged, Civil rights, Fair housing, Individuals with disabilities, Mortgages, Reporting and recordkeeping requirements.
Accordingly, for the reasons stated in the preamble, HUD proposes to amend 24 CFR part 100 as follows:
**PART 100—DISCRIMINATORY CONDUCT UNDER THE FAIR HOUSING ACT**
1. The authority citation for part 100 continues to read as follows:
**Authority:**
42 U.S.C. 3535(d), 3600-3620.
**Subpart A—General**
2. Revise § 100.5(b) to read as follows:
§ 100.5
(b) This part provides the Department's interpretation of the coverage of the Fair Housing Act regarding discrimination related to the sale or rental of dwellings, the provision of services in connection therewith, and the availability of residential real estate-related transactions.
**Subpart G—[Removed and Reserved]**
3. Remove and reserve subpart G, consisting of § 100.500.
Scott Turner,
Secretary.