Criminal background checks are permitted in tenant screening under fair housing law, but the Fair Housing Act limits how landlords can use them: a screening policy that disproportionately excludes applicants of a particular race, national origin, or other protected class violates the Act unless the landlord can prove the policy is necessary to a substantial, legitimate interest and that no less discriminatory alternative would work. That standard applies whether the policy mentions a protected group or not, and it survived HUD’s November 2025 decision to rescind its criminal screening guidance. The statute and the Supreme Court precedent behind it are unchanged.
Why Criminal Screening Falls Under Fair Housing Law
The Fair Housing Act, at 42 U.S.C. ยง 3601, makes it illegal to refuse to rent because of race, color, religion, sex, familial status, national origin, or disability.1Office of the Law Revision Counsel. 42 USC Chapter 45 – Fair Housing Criminal records are not on that list. The link runs through disparate impact: because arrest and incarceration rates in the United States differ sharply across racial and ethnic groups, a screening rule that treats any criminal record as disqualifying tends to screen out applicants of some races at much higher rates than others.
The Supreme Court confirmed in 2015 that disparate impact claims are cognizable under the Act, and HUD’s regulations at 24 CFR 100.500 set out the formal burden-shifting test courts use to evaluate them.2GovInfo. 24 CFR Part 100 Subpart G – Discriminatory Effect A blanket “no criminal history” policy is one of the most common ways landlords land on the wrong side of that test without ever intending to discriminate.
The Three-Step Test a Screening Policy Has to Survive
Disparate impact analysis has three steps, and the way each one works shapes what a defensible policy looks like.
First, the applicant has to prove that the landlord’s policy causes, or predictably will cause, a discriminatory effect on a protected class. Statistical evidence about who gets screened out is usually what does this.
Second, the burden shifts to the landlord, who must prove the policy is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Generalized concerns about “safety” are not enough. The interest has to be real and evidence-based.
Third, even if the landlord clears that hurdle, the applicant can still win by showing the same legitimate interest could be served by a different practice with less discriminatory effect.
A rule that rejects everyone with any criminal record almost always breaks down at step two or step three. A misdemeanor from fifteen years ago tells a landlord very little about current risk, and a narrower policy looking only at recent, serious offenses would serve the safety interest with far less exclusion.
What HUD’s 2025 Rescission Changed
For nearly a decade, HUD’s 2016 Office of General Counsel guidance was the main federal roadmap for criminal screening in housing. It cautioned against blanket bans, encouraged individualized assessments, and flagged arrest records as particularly risky to rely on. On November 26, 2025, HUD rescinded that guidance along with a 2015 notice on arrest records and a 2022 implementation memo, and instructed public housing authorities and owners of federally assisted housing to screen applicants for criminal history before admission.3U.S. Department of Housing and Urban Development. Letter to Public Housing Authorities and Owners on Criminal Screening
What the rescission did not touch: the Fair Housing Act itself, the Supreme Court’s recognition of disparate impact liability, and 24 CFR 100.500. A landlord adopting a “deny everyone with any record” policy in 2026 faces the same statutory exposure as before. HUD’s administrative interpretation is gone; the underlying law is not.
Records That Should Not Drive a Denial
Some categories of records carry so little evidentiary weight that using them to deny housing invites both fair housing and defamation-adjacent problems.
Arrests Without Convictions
An arrest records a law enforcement encounter, not a finding of guilt. The presumption of innocence means an arrest alone tells a landlord almost nothing about risk. Arrest rates also show even starker racial disparities than conviction rates, so screening on arrests is a fast track to a disparate impact problem.
Dismissed Charges and Acquittals
Charges dropped by a prosecutor, dismissed by a court, or ending in a not-guilty verdict have less value than arrests. The system looked at the evidence and did not find the person culpable. Screening policies should exclude these outcomes entirely.
Pending Charges
Open cases have not reached a verdict. Treating an unresolved charge as equivalent to a conviction runs into the same presumption-of-innocence issue, and a blanket policy against anyone with a pending case is hard to justify under step two of the disparate impact test.
The Drug Conviction Carve-Out
The Fair Housing Act contains one explicit exemption tied to criminal history: it does not protect anyone convicted of illegally manufacturing or distributing a controlled substance.4Office of the Law Revision Counsel. 42 USC 3607 – Exemption The exemption reaches production and distribution only. It does not cover simple possession. A landlord who denies an applicant for running a manufacturing operation can point to the statute. A landlord who denies an applicant for a decade-old marijuana possession conviction cannot.
For federally assisted housing, marijuana remains a Schedule I substance under federal law regardless of state legalization. Owners of HUD-assisted properties must deny admission to any household with a member who is currently using marijuana illegally under the Controlled Substances Act.5U.S. Department of Housing and Urban Development. Use of Marijuana in Multifamily Assisted Properties The federal prohibition controls admission to those properties.
Mandatory Exclusions in Assisted Housing
Public housing authorities and Section 8 voucher programs operate under tighter federal rules than the private market. Two categories of applicants must be excluded permanently. Any household including a person subject to a lifetime sex offender registration requirement must be denied, and housing authorities are required to check the state where the housing is located and any other state where household members have lived.6eCFR. 24 CFR 960.204 – Denial of Admission for Criminal Activity or Drug Abuse by Household Members Any household with a member convicted of manufacturing methamphetamine on the premises of federally assisted housing is also permanently excluded, and if the conviction surfaces after assistance has begun, the housing authority must terminate assistance immediately.7eCFR. 24 CFR 982.553 – Denial of Admission and Termination of Assistance for Criminals and Alcohol Abusers Housing authorities have no discretion to waive either exclusion.
Running an Individualized Assessment
For convictions outside those mandatory exclusions, the strongest legal footing a landlord can build is an individualized assessment of each applicant. Even without HUD’s 2016 guidance, this approach remains the most defensible way to survive a disparate impact challenge because it shows the landlord is evaluating actual risk instead of applying a blanket rule.
The core factors are the nature and severity of the offense, how much time has passed, the applicant’s age at the time, and the circumstances surrounding the conviction. A conviction for armed robbery raises different concerns than a bad check charge. A twelve-year-old conviction followed by a clean record is a fundamentally different risk profile than a conviction last year. Someone arrested at nineteen and applying at thirty-five is not the person who committed the offense. Many landlords use look-back windows of five to seven years for less serious offenses, though those timeframes are conventions, not legal requirements.
Applicants should have a real chance to present rehabilitation evidence: completion of treatment or diversion programs, stable employment, education, references from social service providers, or a formal certificate of rehabilitation from a state that issues them. Several states offer these certificates as court orders declaring the person rehabilitated, and in some states a landlord who relies on one receives a presumption of due care against negligent renting claims.
Document every decision in writing. If a denial is challenged later, contemporaneous notes showing that specific factors were weighed for a specific applicant are what separates a defensible decision from one that looks like pretext.
Adverse Action Notices Under the FCRA
When a landlord uses a consumer report, which includes background checks purchased from screening companies, and takes adverse action based on what it shows, the Fair Credit Reporting Act requires notice to the applicant. Adverse action includes denying an application, requiring a larger security deposit, or offering less favorable lease terms.
The notice must include four elements:8Office of the Law Revision Counsel. 15 USC 1681m – Requirements on Users of Consumer Reports the name, address, and phone number of the screening agency that furnished the report; a statement that the agency did not make the decision and cannot explain it; notice that the applicant can request a free copy of the report from the agency within 60 days; and notice that the applicant can dispute the accuracy or completeness of anything in it. The notice may be delivered orally, in writing, or electronically.9Federal Trade Commission. Using Consumer Reports for Credit Decisions – What to Know About Adverse Action and Risk-Based Pricing Notices
The point is to let applicants catch errors: mistaken identity from a common name, records belonging to someone else, or convictions that have been expunged. Willful failures to comply carry statutory damages of $100 to $1,000 per violation, plus actual damages and attorney’s fees.10Office of the Law Revision Counsel. 15 USC 1681n – Civil Liability for Willful Noncompliance Across a class of applicants, those numbers compound quickly.
Penalties for Fair Housing Violations
Enforcement runs through two tracks. In HUD administrative proceedings, base statutory penalties are up to $10,000 for a first violation, up to $25,000 for a second within five years, and up to $50,000 for two or more within seven years, all adjusted annually for inflation.11Office of the Law Revision Counsel. 42 USC 3612 – Enforcement by Secretary When the Attorney General brings a pattern-or-practice case in federal court, the numbers are larger: as of 2026, inflation-adjusted maximums reach $131,308 for a first violation and $262,614 for any subsequent violation.12eCFR. 28 CFR Part 85 – Civil Monetary Penalties Inflation Adjustment Courts in either track can also award compensatory damages to the applicant for emotional distress, out-of-pocket costs, and other harm.
Filing a Complaint
An applicant who believes a landlord’s criminal screening violated the Fair Housing Act can file a complaint with HUD’s Office of Fair Housing and Equal Opportunity within one year of the last date of the alleged discrimination.13U.S. Department of Housing and Urban Development. Learn About FHEOs Process to Report and Investigate Housing Discrimination Complaints can be submitted online through the HUD-903 form, which asks for the basis for the discrimination claim, the landlord’s contact information, the address involved, the dates, and a description of what happened.14U.S. Department of Housing and Urban Development. Report Housing Discrimination HUD’s fair housing line is (800) 669-9777.
A number of cities and states have their own fair chance housing laws that go further than federal law, some prohibiting inquiry into criminal history until after a conditional offer and some limiting which convictions can be considered at all. Check your jurisdiction before assuming the federal framework is the whole picture.