Meanwhile HUD extended the comment period for the proposal from its original May 2 expiration until May 9.

The history of AFFH: Obama, Trump, and Biden's shifting policies

Among the first acts HUD Secretary Scott Turner undertook was to terminate the Obama Administration version of the rule, which the Biden presidency restored that had cancelled an initiative from the first Trump term. Even under Biden, regulators were planning to revise AFFH but never finalized it.

HUD acknowledged National Mortgage News' request for comment on its proposal but had not otherwise responded by press time.

When Turner terminated the rule in February, attorney Robert Maddox of Bradley Arant Boult Cummings noted that the concept itself was a key part of the Fair Housing Act and a simple stroke of the pen could not undo it.

Legal expert warns: new rule weakens fair housing protections

With this new rule, "there no longer is an affirmative duty to look at, you know, the traditions of what racial segregation did in housing," Maddox said in a May 7 follow up interview.

Referring to his earlier comment, Maddox said this proposal is simply "Thou shalt not discriminate." 

"Not, thou shalt not discriminate and affirmatively undo the historical path and break with segregation in housing," he added.

For compliance purposes, all a property developer has to state is that no discrimination exists and that the property needs to be accessible. The rule in the Obama and Biden Administrations had an affirmative obligation requiring subsequent analysis and evidence, Maddox said.

From a development and finance perspective, the interim final rule significantly reduces the amount of analysis as well as any required evidence of the work that was done to prove it affirmatively supports fair housing, which does cut the regulatory burden.

The interim rule was proposed in March and the comment period was supposed to expire on May 2. But a technical problem which cropped up on or about April 28 prevented some commenters from submitting, so an extension notice was published in the Federal Register on May 7.

HUD defends latest fair housing rule as necessary deregulation

"Thirty years of expansive back and forth rulemaking over vague statutory directives is the epitome of regulatory overreach," the latest interim rule justification as published in the Federal Register said. "HUD's 2020 [Preserving Community and Neighborhood Choice] final rule, while taking into account a number of considerations, as detailed in the notice thereof and incorporated herein, fairly targeted and reined in this overreach."

Maddox added, with the deregulatory bent of the Trump Administration, its budget cuts along with reductions in force in the federal government, who would be around to enforce the rule anyhow?

Some 617 comments were posted in the docket as of May 6, according to regulations.gov.

Consumer advocacy groups condemn HUD's 2025 fair housing proposal

"Imagine a society in which every child and every person can live in a neighborhood with ample affordable and accessible housing, fresh air, clean water, good public transportation, living wage jobs, quality healthcare, healthy foods, and affordable credit," said Nikitra Bailey, executive vice president of the NFHA, in a press release and in the opening of the letter. "That is what affirmatively furthering fair housing means.

"However, the Trump administration has backed away from the federal government's duty to affirmatively further fair housing and taken away critical tools that states and localities needed and requested to address the nation's fair and affordable housing crisis and advance the American Dream of having a safe, stable place to call home," she added.

The letter advocates for restoring the 2021 interim final rule.

The National Community Reinvestment Coalition is a signatory to the NFHA letter, and submitted a comment of its own.

"The 2025 AFFH IFR improperly defines AFFH as well as fair housing; and portrays addressing protected classes' specific housing needs that discrimination likely caused as providing 'preferences' based on racial or ethnic characteristics,' instead of redress," the NCRC comment argues.

"Moreover, it merely requires grantees to certify that they will affirmatively further fair housing and does not mention whether HUD will provide municipalities with technical assistance, data, or tools, to help them affirmatively further fair housing."

The NCRC also claimed the Turner proposal will exacerbate economic uncertainty, worsen the affordable housing shortage and aid private equity firms in outbidding first-time home buyers for available properties.

"AFFH's community engagement process — as enshrined in the 2021 interim final rules, but weakened by the 2023 rule and now facing obliteration under the current management of the Executive branch — has the power to bolster and not weaken the American economy and empower local communities to advocate for critical resources to ensure that all Americans have equal access to affordable housing and opportunities," said Nichole Nelson, senior policy advisor at the NCRC.

"AFFH's community engagement process can also help average Americans challenge the predatory economic conditions that have created the affordable housing crisis," Nelson added.

"In the past, AFFH has mitigated the eviction of working-class Philadelphians by establishing the right to legal counsel; helped New Orleanians identify schools as a barrier to successful for all residents; and the City of Chicago enact a July 2022 zoning ordinance that prioritized the development of affordable housing near transportation."

A similar argument is made in the NFHA letter. "As everyday people in America struggle to make ends meet, HUD has issued the watered-down 2025 AFFH IFR, which will only worsen the fair and affordable housing crisis by weakening mandates and taking key tools away from states and localities despite many of them requesting HUD's guidance," it said.

State attorneys general challenge HUD's controversial policy shift

Also commenting was a group of state attorneys general, led by California, Massachusetts and New York; a total of 18 states and the District of Columbia AGs signed off on the letter.

"As chief state law enforcement officials, we have a vested interest in ensuring equal access to housing and eradicating the harmful effects of segregation in our communities," the AGs letter said. "The FHA's AFFH mandate is an essential tool in reaching these goals. The IFR eliminates key aspects of prior rules, undermining HUD's ability to carry out its AFFH obligations."