What HUD's disparate impact rulemaking actually changes

What has HUD actually proposed, and has any of it taken effect?

On January 14, 2026, HUD published a proposed rule titled "HUD's Implementation of the Fair Housing Act's Disparate Impact Standard," docketed at FR-6540-P-01. The proposal is narrow in a specific, technical sense: it would revise 24 CFR 100.5(b) to remove language pointing to a discriminatory effects standard, and remove and reserve subpart G of 24 CFR part 100, which is the section numbered 100.500 that currently codifies HUD's three part burden shifting test for disparate impact claims. HUD gave the public only 30 days to comment, shorter than its usual 60 day practice, and the comment period closed February 13, 2026.

That proposal alone did not finish the job. On August 10, 2026, HUD published a supplemental notice of proposed rulemaking, docketed separately at FR-6540-P-02, which reopened the comment period on the January proposal and added a second target: provisions in HUD's own Title VI regulations, a different statute that governs recipients of HUD federal financial assistance rather than the private housing market the Fair Housing Act covers. That supplemental notice's comment period runs to October 9, 2026. Nothing in either document is final. Checking the current text of 24 CFR 100.500 confirms it, since the section on the books today still carries the same three paragraph structure HUD adopted in 2013 and reinstated in 2023, with no amendment reflecting either 2026 proposal yet applied.

Why is HUD doing this now?

HUD's own preamble ties the timing to a specific executive order. On April 23, 2025, the President issued Executive Order 14281, titled "Restoring Equality of Opportunity and Meritocracy," which states that disparate impact liability creates what it calls a near insurmountable presumption of discrimination whenever outcomes differ across groups, even without a facially discriminatory policy or any discriminatory intent. The order sets a policy goal of eliminating the use of disparate impact liability "in all contexts to the maximum degree possible" and directs federal agencies, HUD among them, to review and consider amending or repealing their own regulations that impose it.

HUD's preamble adds a second, more technical argument on top of that policy directive. It leans on the Supreme Court's 2024 decision in Loper Bright Enterprises v. Raimondo, which ended the practice of courts deferring to an agency's own interpretation of an ambiguous statute. HUD's position is that because a reviewing court will now determine the best reading of the Fair Housing Act itself rather than defer to whatever HUD's regulation says, its own codified interpretation carries less practical weight than it once did, and HUD argues it is more appropriate to remove that codification and let courts interpret the statute directly rather than through an HUD regulation a court owes nothing to. Whether that reasoning holds up is a legal question rather than a settled fact, and it is the kind of argument that produced the opposite outcome the last time HUD tried something similar. A 2020 version of this same rule was stayed by a federal district court in Massachusetts before it ever took effect, and HUD ultimately reinstated the 2013 rule instead in 2023. Nothing about the current proposal guarantees a different outcome this time.

Does this change what the Fair Housing Act itself prohibits?

No, and HUD's own document says so directly. The January 2026 proposal states its own comment period could be shortened specifically because, in HUD's words, "this rulemaking does not change any requirements or affect any rights or obligations." What HUD is proposing to remove is its own regulatory gloss on the statute, meaning the specific three part burden shifting test at 100.500 that tells a court how to weigh a discriminatory effect claim against a defendant's justification and a plaintiff's proposed less discriminatory alternative. The statute those regulations interpret, 42 U.S.C. 3604, has not been amended by Congress and is untouched by anything HUD does through rulemaking.

The Supreme Court settled the more fundamental question a decade before any of this. In Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., 576 U.S. 519 (2015), the Court held that disparate impact claims are cognizable under the Fair Housing Act as a matter of the statute's own text and structure, independent of any HUD regulation interpreting it. HUD's 2013 rule came before that decision and its 2020 rule came after, attempting to narrow the standard to match the Court's own limiting language in that opinion. Removing HUD's regulation entirely does not undo the Supreme Court's holding that the cause of action exists. It removes the specific procedural roadmap HUD had written for how lower courts and its own administrative law judges should apply that holding, and leaves the harder work of defining the standard's exact contours back to case law developing court by court, the way it briefly did between 2015 and 2020.

What does disparate impact liability actually mean for a listing, separate from an intentional slur?

This is the distinction that gets lost in headlines about the rule being scrapped. Fair housing words to avoid in a listing description covers 3604(c), which bans language or imagery that indicates a preference and has never depended on anyone's intent, HUD regulation or no HUD regulation. Disparate impact is a different theory entirely: it targets a facially neutral practice, one that mentions no protected class at all, that still produces a measurably unequal outcome across those classes without a sufficient business justification. A blanket criminal background policy applied the same way to every applicant, an occupancy standard, or an automated system that decides who sees an ad, are the kinds of practices a disparate impact claim reaches, not a sentence in the public remarks.

That last example is not hypothetical for anyone marketing a listing today. Fair housing rules for Meta and Google property ads covers the 2022 Department of Justice settlement over Meta's ad delivery algorithm, a case built on exactly the theory this rulemaking is aimed at: a facially neutral system that produced a skewed result without anyone typing a discriminatory instruction into it. Nothing in HUD's 2026 proposal touches that settlement or the underlying legal theory the Justice Department used to bring it, since DOJ's own enforcement authority under the Fair Housing Act runs through the statute directly rather than through HUD's part 100 regulations. An agent's actual daily exposure, meaning the words in a description and the images in the carousel, sits entirely within 3604(c)'s ban on indicating a preference, and that exposure is identical this week to what it was before either 2026 proposal was published.

What happens next, and where does this stand today?

The realistic range of outcomes is still wide open. HUD could finalize both proposals largely as written, HUD could narrow them in response to comments, or a final rule could face the same kind of court challenge and preliminary injunction that stopped the 2020 version before it took effect, a real possibility given how closely the current proposal follows that earlier, contested history. What is not realistic is treating this as settled either way. An agent who has read that HUD "killed" disparate impact liability is reading a proposal's stated goal, not a finished legal outcome, and an agent assuming nothing will ultimately change is ignoring an executive order that explicitly directs this outcome and a comment period still running past this guide's own publication date.

The safest posture for anyone writing or advertising a listing right now is to treat this as background rather than as license. Nothing about 3604(c)'s ban on discriminatory language or imagery is affected by any version of this rulemaking. Nothing about a state or local fair housing law's own disparate impact standard, where one exists independent of HUD's regulation, changes either. Checking the current text of 24 CFR 100.500 before relying on any claim about what it now says is worth the two minutes it takes, given how much distance separates a January proposal, an August supplemental notice, and a section of the Code of Federal Regulations that, as of this guide's publication, has not yet been amended by either one.

Date	Action	Status as of this guide
February 15, 2013	HUD publishes the original discriminatory effects rule at 100.500	Superseded, then reinstated below
June 25, 2015	Supreme Court decides Inclusive Communities, holding disparate impact claims are cognizable under the Act	Controlling, unaffected by any HUD rulemaking
September 24, 2020	HUD narrows the standard, the 2020 rule	Enjoined before its effective date, never took effect
March 31, 2023	HUD reinstates the original 2013 standard	This is the version currently in force
January 14, 2026	HUD proposes removing 100.500 entirely	Proposed rule, comment period closed, not finalized
August 10, 2026	HUD reopens comment, adds Title VI regulations to the same proposal	Comments due October 9, 2026, not finalized

Frequently asked questions

Is the 2013 disparate impact standard still legally in effect right now?

Yes. The version of 24 CFR 100.500 currently published in the Code of Federal Regulations is the one HUD reinstated in its March 2023 final rule, and it has not been amended by either the January or the August 2026 proposals, both of which remain open rulemakings rather than finished ones.

If HUD finishes removing the regulation, does disparate impact liability disappear?

Not automatically. The Supreme Court's 2015 decision in Inclusive Communities already established that disparate impact claims exist under the statute itself, separate from any HUD regulation interpreting it. Removing HUD's own codified test would leave courts to develop the standard case by case rather than eliminate the underlying claim, though it would remove the specific procedural roadmap plaintiffs and defendants currently rely on.

Does this affect the words I can use in a listing description?

No. Disparate impact addresses facially neutral practices with an unequal effect, not language that indicates a preference on its face. That second category is governed by 3604(c) directly, has never depended on HUD's disparate impact regulation, and is unaffected by anything in either 2026 proposal.

Where can I check whether this has been finalized since this guide was published?

The current text of 24 CFR 100.500 is published at eCFR.gov and reflects amendments as they take effect, typically faster than most secondary summaries. The Federal Register's own docket pages for FR-6540-P-01 and FR-6540-P-02 show whether either proposal has moved to a final rule.

Sources

Last verified: 2026-09-07