HUD Secretary Fudge Sends Letter Urging Rental Housing Providers to Limit Junk Fees

HUD Secretary Marcia L. Fudge sent an open letter urging rental housing providers and property management services to enact fee-related policies that would help create a fairer and more transparent rental market, as championed in President Biden’s Blueprint for a Renters Bill of Rights. When searching for a home, renters are often faced with hidden, duplicative, and unnecessary fees that create a financial burden. Renters must often apply to several units, incurring many non-refundable costs, such as rental application fees, administrative fees, and other processing fees, which can add up to hundreds and even thousands of dollars. These fees are a significant burden for renters and are often used to pay for tenant screening reports that may provide landlords or rental companies with inaccurate information. The process can prevent renters from being selected for a unit, deplete their funds, and complicate and delay their ability to find affordable housing.

In his administration’s Blueprint for a Renters Bill of Rights, President Biden challenged local communities and housing providers to participate in a Resident-Centered Housing Challenge by providing clear and fair leases without hidden or illegal fees (see Memo, 1/30). In her letter, Secretary Fudge reaffirmed this challenge and urged all housing providers, as well as state and local governments, to take action and transparently disclose fees charged to renters. These initiatives should promote fairness and transparency for renters and ensure that the costs paid by renters reflect actual, legitimate expenses. In particular, the letter urges:

  • Eliminating rental application fees or limiting application fees to only those necessary to cover actual and legitimate costs for services.
  • Allowing a single application fee to cover multiple applications on the same platform or across multiple properties owned by one housing provider or managed by one company across providers.
  • Eliminating duplicative, excessive, and undisclosed fees at all stages of the leasing process, such as administrative fees and other processing fees in addition to rental application fees.
  • Clearly identifying bottom-line amounts that tenants will pay for move-in and monthly rent in advertisements of rental property and in lease documents, including all recurring monthly costs and their purposes.

Secretary Fudge also reiterates HUD’s commitment to supply communities with research, ideas about best practices, and tools that can be used by all providers to increase transparency and promote fairness in the rental housing market. HUD will also work with the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, the Federal Trade Commission, and the U.S. Department of Agriculture to determine the best practices in screening tenant applications and encourage housing providers to adopt such practices.

Read Secretary Fudge’s letter at:

Read NLIHC’s statement on President Biden’s Blueprint for a Renters Bill of Rights here.