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HAC Opposes HUD Proposal to Eliminate Disparate Impact Fair Housing Rules

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The Department of Housing and Urban Development has proposed to change its Fair Housing Act regulations. The revisions would eliminate HUD’s rules on disparate impact — the legal concept that conduct is discriminatory if it has inequitable effects, even if there was no intent to discriminate. HAC does not support the proposed change and strongly urges HUD to retain and enforce its current rule. HAC argues that:

  • “Housing affordability and fair housing connect through the principle of ‘disparate impact.’”
  • Rural borrowers more often receive loans with more costly terms and rural residents are disproportionately members of protected classes.
  • Court decisions have not invalidated disparate impact liability.
  • HUD has an explicit statutory responsibility to ensure equal opportunity and freedom from discrimination.
HAC Disparate Impact Comments 2026 Final
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HAC Opposes Proposed Changes to ECOA Equal Lending Rule

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The Consumer Financial Protection Bureau has proposed to change its rules for the Equal Credit Opportunity Act, which requires fairness in lending, including mortgage lending. The revisions would eliminate use of disparate impact — the legal concept that conduct is discriminatory if it has inequitable effects, even if there was no intent to discriminate — and would revise provisions on discouragement of applicants or prospective applicants and on special purpose credit programs. HAC’s response argues that disparate impact is a necessary tool to identify discrimination in mortgage lending, including discrimination against rural residents.

CFPB ECOA disparate impact HAC Final

HAC Comments on Proposal to Outsource USDA Single-Family Loan Servicing

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USDA is collecting comments from stakeholders and potential vendors to take over a portion of the single-family loan servicing functions currently handled by the Servicing Office in St. Louis. The Servicing Office was established in 1996 in St. Louis, Missouri as part of USDA Rural Development’s national restructuring effort to centralize loan servicing functions. Over the last three decades, the office has become the core operational center for the single-family programs, managing more than 185,000 active loans and approximately $14.5 billion in outstanding debt. Comments and vendor proposals were due on July 16. HAC submitted comments opposing this privatization of single-family loan servicing. Our comments highlighted that:
  • Servicing for this portfolio is unique due both to the structure of the loan products and the needs of the borrowers served. Any external vendor would have a steep and costly learning curve.
  • Given these unique and complex servicing needs, cost savings of privatization are highly unlikely. Any anticipated cost savings need to be made public before this process moves forward.
  • A better solution lies in adequately staffing the Servicing Office and upgrading its servicing technology.
HAC’s full comment can be viewed here:

Resilience Related Federal Register Items – January 13, 2025

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Rural communities are often on the front lines of disaster recovery, requiring clear guidance and timely access to resources.

To support these efforts, we’re sharing two important updates: HUD’s “CDBG-DR Universal Notice” and FEMA’s updated Public Assistance Program and Policy Guide. These resources provide vital information to help rural governments, nonprofits, and communities navigate the complexities of disaster recovery and build resilience.

This “CDBG-DR Universal Notice: Waivers and Alternative Requirements” describes the processes, procedures, timelines, waivers, and alternative requirements that HUD intends to implement with each allocation of CDBG-DR. When CDBG-DR funds are appropriated, HUD will publish an Allocation Announcement Notice in the Federal Register that incorporates the waivers and alternative requirements provided in the Universal Notice, as appropriate, along with any other new requirements imposed by the specific appropriation. The Universal Notice is intended to provide grantees and the public with increased transparency, consistency, and more timely access to CDBG-DR funds. The Universal Notice, which serves essentially the same function as program regulations, incorporates public feedback from a 2022 request for information and is intended to improve the program in a variety of ways.

FEMA has updated its Public Assistance Program and Policy Guide. The PA program assists governments and nonprofits.

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HAC Supports Rural Provisions in Capital Magnet Fund Interim Rule

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The CDFI Fund has released for comment an interim rule for the Capital Magnet Fund (CMF) program. The Capital Magnet Fund offers competitively awarded grants to CDFIs and nonprofit affordable housing organizations to finance affordable housing solutions and community revitalization efforts that benefit individuals and families with low-incomes and low-income communities nationwide. HAC has received several CMF awards, most of which have been used for the preservation of USDA’s Section 515 multifamily properties amid the maturing mortgage crisis. HAC is broadly supportive of the CMF interim rule, and submitted comments on several rural elements, including:
  • Support for the addition of a national Rural Service Area. This change will make it easier to use CMF in rural areas, and will all organizations who serve rural areas across the country to be nimble and flexible with their CMF funds.
  • Support for aligning CMF income targeting with other federal programs, with the caveat that the application competition should prioritize applications that propose deeper income targeting. Not all CMF deals include LIHTCs, especially in rural places. We encourage the CDFI Fund to consider how to continue to encourage this deeper income targeting in the CMF application scoring process, since raising the Very Low-Income threshold could result in fewer households under 50 percent AMI being served.
  • Support for the use of the Duty to Serve definition for rural areas. HAC has done extensive research on the myriad of rural definitions, and feels that the Duty to Serve definition is the most precise rural definition available.
HAC CMF Rule Comments 08.26.24
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HAC Comments on Proposed New Rule for HOME Investment Partnerships Program

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In late May, HUD published a proposed rule which would enable much needed revisions and updates to the requirements governing the HOME Investment Partnerships program. The proposed rule would make changes across the HOME program, from homeownership to rental, and included a specific focus on improving Community Housing Development Organization (CHDO) availability and capacity in rural areas. In response, HAC submitted comments on the proposed rule, applauding many of the proposed changes and pushing for additional rural-focused priorities. Specifically, key takeaways in HAC’s comments included:
  • The reality of the rural landscape must be taken into consideration as this new rule is finalized. Affordability is the greatest issue facing rural communities, like it is for the country at large. But rural areas are also disproportionately impacted by persistent poverty, substandard and overcrowded housing, and a lack of local capacity and access to capital.
  • Varying HOME program administration across Participating Jurisdictions (PJs) has been the most significant barrier for the small rural communities we serve. Over the last decade, we have observed that rural organizations experience significant challenges in effectively accessing HOME funds. Primarily, these difficulties arise from how PJs have adapted their programs, largely as a response to the 2013 regulation changes and subsequent funding reductions. PJs will need significant training in the impacts of this new rule to ensure it is implemented effectively.
  • Regulatory change alone cannot solve all the challenges within the HOME program. Because of the highly prescriptive nature of the HOME statute, a variety of statutory changes are also needed to fully transform the program such that it more positively impacts rural America.
  • Rural Community Housing Development Organizations will benefit from the proposed changes, but more is needed to move the needle. HAC applauds changes to Board Member requirements, organizational capacity requirement, and capacity building funds. We do, however, have concerns around the proposal to allow for statewide CHDOs, intended to improve rural program outcomes. Statewide CHDOs could inadvertently further disadvantage small, rural groups who are hoping to access the CHDO set-aside by forcing them to potentially compete with high-capacity, statewide organizations.
  • Streamlining and improved flexibility across the program is welcome. Helpful changes are proposed with respect to homebuyer housing, rental housing, Community Land Trusts, tenant-based rental assistance, tenant protections, maximum per-unit subsidy limits, and green and resilient property standards. These changes will help small, lower capacity groups to access and see success with the HOME program.
HAC HOME Rule Comments 07.29.24 FINAL
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HAC Comments on Duty To Serve Plan Modifications – December 2023

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The Federal Housing Finance Agency (FHFA) put out a call for comments on the Enterprises’ (Fannie Mae and Freddie Mac’s) proposed 2023 Duty to Serve Plan modifications. Both Enterprises proposed cutting a variety of their loan purchase goals in rural areas, citing market conditions as the justification. HAC pushed back on these proposed cuts in our comments. Specifically, HAC made in following points in our comment:

  • HAC is generally agnostic as to which section of Freddie Mac’s Duty to Serve plan USDA Section 515 purchases fall under, but strongly supports their continued inclusion and tangible results. We support mainlining the Section 515 purchases currently included in the rural section of the plan because they focus on rural-targeting of properties.
  • HAC opposes cuts to loan purchase goals in high-needs rural regions and from small, rural financial institutions.
  • HAC opposes cuts to loan purchase goals for manufactured housing communities.
  • HAC supports Fannie Mae’s new proposed objective to better serve the manufactured housing needs of Native communities.
  • HAC support permitting the Enterprises to make investments in CDFIs – a decision which relies on approval from the FHFA.
HAC DTS Plan Modification Comments 12.06.23 FINAL
Policy News from the Administration

HAC Comments on OMB Guidance on Grants and Agreements – December 2023

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The Office of Management and Budget (OMB) put out a call for comments on their guidance for Grants and Agreements, with a lens toward making grants processes more equitable. HAC submitted comments in support of more proactive geographic equity in the federal grants process. In addition to recognizing capacity building and access to capital as two essential equity issues in rural places, HAC’s comments focused on the recommendations below.

  • Instituting a Rural Impact Analysis for New Regulations
  • Investing in Capacity Building and Rural Intermediaries
  • Eliminating, Reducing or Modifying Cost-sharing and Matching Requirements that Disparately Impact Rural Communities
  • Streamlining and Increasing Uniformity in Applications
  • Including or Increasing Administrative and Predevelopment Costs as Eligible Activities in Rural Places
  • Recognizing the Rural Challenges in Metrics and Data Reporting
HAC Comments on OMB Guidance on Grants and Agreements 12.04.23
Policy News from the Administration

HAC’s Comments on Rental Assistance Decoupling – August 2023

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The Fiscal Year 2023 President’s Budget included a request to decouple USDA Section 521 Rental Assistance from Section 515 Multifamily Loans to facilitate the rehabilitation and preservation of the multifamily portfolio. To explore the potential impacts, Congress directed USDA to conduct a series of stakeholder meetings and provide a report on how decoupling would be implemented. HAC submitted comments in support of decoupling, with a focus on the topics below.

  • Making Long Term Affordability Parameters the Top Priority
  • Considering A Pilot Concept When Implementing Decoupling
  • Clarifying the Annual Rent Increase Process for Decoupled RA Units
  • Establishing A Plan for Units Without Rental Assistance in Decoupled Properties
  • Maintaining Support for the Entire Suite of Preservation Programs, Even If Decoupling Becomes an Option
  • Establishing A Plan for Prepayments, Since the Bulk of Units Are Lost to Prepayments
  • Improving Data Transparency At RHS

Read HAC’s full comments.

HAC Decoupling Comments 2023
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HAC’s Comments on Duty to Serve – July 2023

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The FHFA requested comments on Fannie Mae and Freddie Mac’s Duty to Serve plans as part of their annual Duty to Serve Listening Sessions. Jonathan Harwitz, HAC’s Director of Public Policy, provided oral comments, accompanied by longer written comments, on behalf of HAC. If implemented robustly, Duty to Serve has the potential to improve the lives of people living in the most underserved communities. HAC’s comments focused on:

  • Maintaining USDA Section 515 preservation as a core goal of the rural Duty to Serve Plans;
  • Permitting targeted equity investments in CDFIs;
  • Using, and further refining, the new Colonias Census Tract definition; and
  • Meeting rural LIHTC equity investment goals.

Read HAC’s full comments.

HAC DTS Rural Listening Session Comments

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