12/7/2021 in News & Media, NFHA News, Press Releases

NFHA Commends HUD on Release of Guidance to Advance Racial Equity


December 7, 2021

Contact: Izzy Woodruff | 202-898-1661 | IWoodruff@nationalfairhousing.org

NFHA Commends HUD on Release of Guidance to Advance Racial Equity

HUD’s guidance on Special Purpose Credit Programs will expand credit opportunities for underserved borrowers

Washington, D.C. — Today, the Department of Housing and Urban Development (HUD) released a legal opinion and statement supporting the use of Special Purpose Credit Programs (SPCPs) and clarifying that SPCPs, where instituted in conformity with the Equal Credit Opportunity Act (ECOA) and Regulation B, would not violate the Fair Housing Act. In response, the National Fair Housing Alliance (NFHA)’s President and CEO, Lisa Rice, issued the following statement:

“The National Fair Housing Alliance applauds HUD for this ground-breaking development, and we are grateful to Secretary Marcia Fudge for acting quickly to release guidance on the application of the Fair Housing Act to Special Purpose Credit Programs (SPCPs). We also appreciate HUD’s leadership team, including the Office of General Counsel and Office of Fair Housing and Equal Opportunity, for the significant roles they played in issuing this guidance. HUD’s clarification that SPCPs fulfill the letter and spirit of the Fair Housing Act will provide much-needed confidence to lenders and other entities who want to provide meaningful solutions to consumers and communities long blocked from accessing fair credit opportunities. 

“Inequity is baked into our housing and finance systems. Our markets are unfair by design. As a result of centuries of discriminatory policies and practices, too many communities are credit deserts and lack access to banks, credit unions, and other traditional financial services. These communities are often plagued by higher-cost financial service providers, like payday lenders, check cashers, and hard money lenders. This dual credit market fuels segregation, housing instability, and financial inequities, and it is part of the reason why consumers of color are disproportionately credit-invisible. The dual credit market also perpetuates the racial wealth and homeownership gaps. 

“SPCPs provide a way to overcome structural barriers and enable lenders to develop mortgage and other credit programs that are intended to reach underserved borrowers and communities. They can be designed to serve a class of persons identified as residents of color who reside in low-to-moderate income census tracts, residents of majority-Black census tracts, woman-owned small business owners, consumers with limited English proficiency, or residents living on tribal lands.

“While SPCPs are a vital tool in expanding fair access to credit, particularly for consumers and communities impacted by discrimination, and are authorized by ECOA, some have had questions about whether these credit programs comply with the federal Fair Housing Act. Today’s HUD guidance settles those questions: SPCPs designed and implemented in accordance with ECOA do not violate the Fair Housing Act. Moreover, HUD’s guidance emphasizes that while ECOA and the Fair Housing Act regulate overlapping and different types of credit activities and entities, the laws are ‘complementary and should generally be harmonized.’ 

“This issue is a top policy priority for NFHA, and we have pursued this concept in many settings, including meetings with staff at HUD and other agencies, publication of a detailed blog post, a virtual forum on the topic, and in a letter to HUD sent jointly with the Mortgage Bankers Association. The overwhelming feedback we have received has convinced us that there is widespread interest in the use of SPCPs to create more equitable access to homeownership. HUD’s actions today should eliminate a major impediment to their use and help set us on a path toward closing the racial homeownership gap in this country.”


The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for over 200 fair housing and justice-centered organizations and individuals throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.