FHFA Finalizes Rollback Of Biden-Era Fair Housing Oversight Rules

The government’s main housing sector watchdog repealed rules that required federal agencies to actively show they were complying with fair housing laws.

The Federal Housing Finance Agency, led by Bill Pulte, a longtime ally of President Donald Trump, finalized the repeal of a regulatory framework from 2024 that codified and expanded reporting requirements meant to ensure the government was affirmatively working to further equity in housing.

FHFA has oversight authority over Fannie Mae, Freddie Mac and the other government-sponsored entities that underpin the U.S. housing market.

The agency said it is rescinding the rules because they run afoul of executive orders that prohibit programs and data analytics that focus on specific ethnic groups and said many of the regulations were duplicative of existing rules. 

Housing groups, civil rights advocates and a U.S. senator counter that the rules were a common sense solution that empowered agencies to work together to advance housing access through an accountability framework that identified bad actors. 

“There has been a change in federal policy with respect to activities that promote equity since FHFA published the final Fair Lending, Fair Housing, Equitable Housing Finance Plans rule in 2024,” the agency wrote in its July proposal, which opened the rules change to public comment. 

The comment is a reference to the Trump administration's far-reaching efforts to eliminate programs targeted at helping specific ethnic groups and to erase diversity, equity and inclusion initiatives from federal policy.

The rules' official repeal was announced on Feb. 6, with the changes effective March 9.

The National Fair Housing Alliance said the FHFA is retreating from its statutory responsibility to further housing opportunities in a move that will undermine efforts to increase homeownership for low- and middle-income Americans. 

“At a time when homeownership is increasingly out of reach for many families, FHFA has chosen to abandon a proven framework for accountability, innovation, and fair access to credit,” the Washington, D.C.-based advocacy group said in a statement. 

The Fair Lending, Fair Housing, and Equitable Housing Finance Plans regulation was first adopted in May 2024 under then-President Joe Biden.

The rules were created as part of a broader, historic rubric of legislation and regulations rooted in the Fair Housing Act of 1968 and the Federal Housing Enterprises Financial Safety and Soundness Act, which passed in 1992 and created a regulatory framework to ensure that agency lenders reached underserved areas. 

The 2024 rules expanded existing regulations and created new reporting requirements for agency lenders. FHFA said they were duplicative of existing guidelines, created inefficiencies in enforcement that wasted taxpayer dollars, and could violate other recent executives orders.

Democratic Sen. Catherine Cortez Masto from Nevada, the National Community Reinvestment Coalition, the NAACP Legal Defense Fund and other advocacy groups joined the National Fair Housing Alliance in objecting to the repeal of the rules during the public comment period. 

“If the 2024 Fair Lending Rule is eliminated, this action would decrease housing opportunities for low-income and underserved communities while also undermining the safety and soundness of the housing finance system,” David Wheaton, assistant policy counsel at the NAACP LDF, wrote in the agency’s commentary letter.

Groups including industry advocacy agency U.S. Mortgage Insurers, the trade organization Housing Policy Council and the Conservative Political Action Coalition Foundation Center for Regulatory Freedom were among those who submitted letters in support of the repeal. 

“FHFA’s proposal is further strengthened by its recognition that DEI-based mandates are no longer consistent with federal policy direction. By removing these provisions, the agency is ensuring neutrality, focusing squarely on statutory housing goals and safety and soundness responsibilities,” CPAC CRF Director Andrew Langer wrote in a letter of support.