FHFA Proposes to Roll Back Fair Lending and Housing Equity Rule

The Federal Housing Finance Agency (FHFA) has announced a proposal to rescind a major regulation issued in 2024 that established oversight standards for fair lending and equitable housing practices among the country’s largest housing finance entities.

Known as 12 CFR Part 1293, the rule placed specific requirements on Fannie Mae, Freddie Mac, and the Federal Home Loan Banks to develop equity-focused housing finance plans, implement fair lending compliance systems, and report related data. Now, the agency says it wants to walk back those mandates in favor of reducing regulatory complexity and aligning with recent federal directives.

Why FHFA Wants to Repeal the Rule

In a statement, FHFA said it had re-evaluated the regulation as part of a broader agency-wide review aimed at reducing burdens, avoiding overlap with other federal regulators, and ensuring the efficient use of both public and private resources.

FHFA noted that the rule imposes a significant economic impact estimated at more than $100 million annually—despite not being mandated by law. The agency emphasized that its move to repeal is part of a shift toward what it described as more fiscally responsible oversight practices.

A Shift in Federal Priorities

The proposal comes in response to Executive Order 14219, signed by President Trump in February 2025. The order directed all federal agencies to evaluate their regulatory frameworks and eliminate any rules inconsistent with the administration’s new policy directives. Those directives emphasize reducing unnecessary spending and removing policies viewed as giving preference to certain groups under diversity, equity, and inclusion (DEI) initiatives.

FHFA also cited Executive Order 14173, which focuses on eliminating what the administration views as discriminatory or preferential equity-based programs. In line with these policies, FHFA now argues that repealing the fair lending and equity housing rule would help avoid duplication, clarify agency roles, and eliminate regulatory overlap with other entities such as HUD and the Consumer Financial Protection Bureau (CFPB), which traditionally lead on civil rights enforcement in housing.

Background on the Rule

The rule at risk of repeal was finalized in May 2024, under prior FHFA leadership. It was designed to strengthen oversight of discriminatory lending practices and to help regulated entities proactively expand homeownership and lending access in underserved communities. The rule also required Fannie Mae and Freddie Mac to submit Equitable Housing Finance Plans and to engage with stakeholders to address disparities in housing access.

Public Comments Open Until September

The FHFA is seeking public input on its repeal proposal. The comment period is open through September 26, 2025. Stakeholders, including advocacy organizations, lenders, and consumers, are expected to weigh in on the implications of rolling back what many consider a cornerstone regulation in the federal fair housing landscape.

What’s Next?

If finalized, the repeal would represent a significant retreat from government-led equity initiatives in housing finance. It could also shift the burden of enforcement and program development to other federal or state agencies. Critics are likely to argue that repealing the rule undermines hard-fought progress in narrowing racial and economic gaps in housing access, while supporters may welcome the move as a step toward deregulation and streamlined government.

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