The Department of Housing and Urban Development (HUD) issued a “Dear Colleague” letter to real estate professionals clarifying that sharing crime or school quality information with prospective homebuyers or renters is not a violation of the Fair Housing Act (FHA) when shared without discriminatory intent.
The letter follows closely on the heels of a final rule issued by the Consumer Financial Protection Bureau (CFPB) to eliminate the disparate impact standard from Regulation B, which implements the Equal Credit Opportunity Act. These developments reflect a coordinated shift across federal regulators away from disparate impact-based civil rights enforcement and toward a framework grounded in intentional discrimination.
Background
During the Biden administration, certain real estate brokerages and listing platforms restricted or discouraged the sharing of neighborhood-level information, invoking fair housing concerns as justification. The National Association of Realtors (NAR) also issued guidance suggesting that the FHA prohibited real estate professionals from discussing topics such as school quality and neighborhood safety, and warned that answering client questions about local schools could amount to “inadvertently steering” clients.
In the “Dear Colleague” letter, HUD traces this pullback to a 2021 Biden administration directive instructing the agency to prevent “practices with an unjustified discriminatory effect” and address racial bias across all stages of home buying and renting. The HUD letter notes that the Biden-era directive has been superseded by a subsequent executive order issued by President Donald Trump in April 2025 directing federal agencies to restore equality of opportunity and meritocracy.
The ‘Dear Colleague’ letter
HUD makes the following key points in its letter:
Sharing neighborhood data is not unlawful steering
HUD asserts that unlawful steering under the FHA requires intentional discrimination based on protected characteristics, and that providing prospective homebuyers with information about school quality and crime data is not a violation when shared consistently and without discriminatory intent. HUD notes that the US Supreme Court has defined racial steering as “directing prospective homebuyers interested in equivalent properties to different areas according to their race”. As interpreted by courts and HUD’s own regulations, a violation of the FHA’s prohibition on making a home unavailable or reusing to negotiate its sale or rental “because of race” or on statements expressing a racial preference requires an intent to direct clients based on race or the prevailing racial composition of a neighborhood.
First Amendment considerations
The letter takes the position that the FHA imposes no blanket prohibition on real estate agents discussing neighborhood safety or educational options with prospective clients, and that construing the statute to prohibit real estate professionals from discussing those topics would raise significant First Amendment concerns.
The fiduciary dimension
The letter states that the realtor-client relationship carries fiduciary obligations, and that the free exchange of nonracial information about purchasing and rental options is central to that relationship.
Directives for FHAPs and FHIPs
The letter states that Fair Housing Assistance Programs (FHAPs) should not issue findings of discrimination against real estate professionals who answer client questions on or provide school and crime data to clients on an equal and consistent basis. It also notes that Fair Housing Initiatives Programs (FHIPs) should not use federal funds to pursue complaints based on the sharing of such information equally with clients. Finally, it notes that neither FHAPs nor FHIPs should use or distribute materials that incorrectly treat the FHA as grounds for preventing real estate professionals from discussing nonracial information about neighborhood crime and schools.
Looking ahead
The HUD “Dear Colleague” letter sets forth a recalibration of fair housing compliance expectations for real estate professionals. HUD specifically calls on the industry to review its ethics trainings and reevaluate prior positions that “stifle” speech regarding nonracial neighborhood characteristics that are material to housing decisions. It also states that the real estate industry should reassess guidance it has received from diversity, equity and inclusion-focused advisors, noting that such programs have relied on the disparate impact theory to justify differential treatment.
Practitioners should note that the withdrawal of disparate impact enforcement does not alter the prohibition on disparate treatment, and that intentional discrimination remains fully prohibited under the FHA. Further, state law may impose independent obligations – that is, states may maintain disparate impact standards or impose additional requirements on real estate professionals. Practitioners should assess applicable state-level obligations separately from this federal guidance.