By Kayla Blackwell, NLIHC Housing Policy Analyst and Kayla Springer, NLIHC Policy Intern
On August 4, 2025, HUD sent a final rule on its implementation of the “Fair Housing Act” disparate impact standard to the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB). While the content of the rule has not yet been published in the Federal Register, the notice in OIRA comes as the Trump Administration seeks to significantly dismantle the disparate impact standard. NLIHC will continue to monitor the rule at OIRA and work with fair housing partners to uphold fair housing laws.
The disparate impact standard of the “Fair Housing Act” prohibits practices that disparately impact members of protected classes, even without explicitly discriminatory intent, and it remains a key tool for combating harmful housing policies. The rule follows the Trump Administration’s April executive order prohibiting the application of the disparate impact standard (See Memo, 4/28). Since then, HUD has made plans to dismiss seven major housing discrimination cases, three of which had already been found to constitute fair housing violations.
The Trump Administration’s 2020 disparate impact rule, which created hefty barriers for individuals to win disparate impact discrimination cases, may indicate the direction of the recent final rule. Although the 2020 rule nominally preserved the disparate impact standard, it amended the standard to rule out segregation as a discriminatory effect and shifted a virtually insurmountable burden to prove discrimination onto the plaintiff (see Memo, 9/13/2020). These amendments made it nearly impossible for victims of housing discrimination to win their cases, and the rule was later struck down in 2021. It’s also possible that HUD’s 2025 final rule may seek to eliminate the disparate impact standard entirely.
Moreover, HUD’s filing of the recent disparate impact rule as a “final rule,” rather than a “proposed rule,” shows the Administration’s attempt to bypass the usual public notice and comment period. Regardless of the 2025 rule’s direction, any attempt to draw back the disparate impact rule will likely conflict with the standard’s significant legal precedent. HUD has interpreted the “Fair Housing Act” as prohibiting housing policies that have a discriminatory impact without apparent intent to discriminate for over 40 years, and in 2015, the disparate impact standard was upheld by the Supreme Court in Texas Dept. of Housing & Community Affairs v. Inclusive Communities Project.
Since its enactment, the disparate impact rule has been a crucial tool for protecting marginalized populations from discriminatory housing practices like redlining, appraisal bias, and exclusionary zoning. NLIHC recently signed a letter calling on HUD to reject the Trump Administration’s recent attacks on the “Fair Housing Act” disparate impact rule and uphold fair housing protections. The recent final rule on disparate impact may solidify these attacks, threatening the right of individuals to find safe, accessible, and affordable housing without facing discrimination.
Check the status of the 2025 disparate impact rule here.
Learn more about the history of the disparate impact rule here.
Read NLIHC’s analysis of the Trump Administration’s 2020 rule on disparate impact here.