HUD Retreats from Fair Housing Enforcement: Why Compliance Still Matters

The federal Fair Housing Act requires the U.S. Department of Housing and Urban Development (HUD) to enforce laws prohibiting discrimination in housing. However, by late 2025, it has become increasingly evident that HUD is stepping back from this statutory duty. For owners and managers of residential properties, this shift in federal stance presents potential confusion and risks. Although HUD’s disengagement might signal a decreased focus on enforcement, adhering to fair housing laws remains as vital as ever.

HUD’s Office of Fair Housing and Equal Opportunity (FHEO), the division responsible for investigating and prosecuting discrimination complaints, has experienced significant staff reductions. The Administration’s proposed 2026 budget reflects deep cuts to fair housing enforcement activities, reducing the federal government’s capacity to monitor, investigate, and address violations of the law.

A Year Without Federal Enforcement Action

As of August 31, 2025, HUD has not filed a single housing discrimination charge since the new Administration took office in January. This is a stark contrast to previous years, when HUD regularly filed dozens of charges each year. The lack of enforcement activity sends a concerning message to both the housing industry and those who depend on federal protections: that the federal government will not actively pursue complaints of discrimination.

Closure of Pending Cases

Equally concerning, at least 115 federal fair housing cases that were pending earlier this year have been closed without resolution. This development weakens individuals’ ability to obtain relief from discrimination and diminishes confidence in HUD’s dedication to enforcing the Fair Housing Act.

Loss of Support for Local Fair Housing Efforts

In February, HUD ended $30 million in Fair Housing Initiative Program (FHIP) grants. These grants traditionally supported nonprofit groups that provided education, outreach, and initial investigations into housing discrimination complaints. Cutting this funding has weakened the network of local organizations that act as the first line of defense against discrimination.

Curtailment of Disparate Impact Protections

In April, HUD removed the page dedicated to Fair Housing and Equal Opportunity from its website. At the same time, President Trump signed an Executive Order directing federal agencies to eliminate the use of disparate impact liability "in all contexts to the maximum degree possible." Disparate impact has long been a vital legal tool for challenging practices that, although facially neutral, have discriminatory effects. Restricting its use significantly narrows the avenues available to address systemic housing inequities.

Repeal of the AFFH Rule

Also in April, HUD repealed the Affirmatively Furthering Fair Housing (AFFH) rule. Adopted in 2015, the AFFH rule required jurisdictions receiving HUD funds to analyze patterns of segregation and take steps to expand housing opportunities. Its repeal marks a step back from proactive strategies aimed at promoting inclusivity and integration in housing.

Planned Repeal of Affirmative Fair Housing Marketing Regulations

In June, HUD announced its intent to repeal the Affirmative Fair Housing Marketing (AFHM) regulations. These long-standing rules have required owners and managers of HUD-assisted housing to actively market to populations that might otherwise be excluded from opportunities. Their repeal would eliminate a crucial safeguard that ensures equal access to federally assisted housing.

Implications for Owners and Managers

While HUD may be stepping back from its enforcement role, state and local governments are not. Many states and municipalities maintain strong fair housing enforcement agencies and have increased their efforts recently. These agencies are actively investigating complaints and prosecuting violations under state and local laws, which often provide protections that are equal to or even stronger than those under federal law.

For owners and managers of residential real estate, the message is clear: do not interpret HUD’s retreat as a license to relax compliance efforts. The Fair Housing Act remains in full force, and state and local enforcement remains vigorous. Sound compliance policies, ongoing staff training, and proactive risk management are essential to avoiding costly investigations, litigation, and reputational damage.

Bottom line: While HUD may be abdicating its responsibility under the current administration, the obligation to comply with fair housing laws remains unchanged. Vigilance in compliance is not optional—it is a business necessity.