Seven federal agencies on Monday rescinded a 2022 interagency statement that had encouraged lenders to develop special purpose credit programs aimed at expanding mortgage access for historically disadvantaged borrowers. The rescission, published in the Federal Register on August 25, 2026, marks the latest step in a broader policy shift under the Trump administration away from race-conscious lending programs.
The agencies—including the Department of Housing and Urban Development, Consumer Financial Protection Bureau, Federal Housing Finance Agency, FDIC, Office of the Comptroller of the Currency, National Credit Union Administration, and Department of Justice—said the 2022 guidance conflicts with the Equal Credit Opportunity Act, the Fair Housing Act, and Supreme Court precedent. The move affects lending programs that had provided down payment assistance, closing cost help, and rate buydowns to borrowers who share common characteristics such as economic disadvantage.
Lenders are now warned not to rely on the Biden-era guidance going forward, with regulators signaling that programs conflicting with the new interpretation could face regulatory consequences.
The policy reversal
What changed and why agencies acted now
The rescission targets a February 2022 statement that reminded lenders they could legally offer special purpose credit programs under federal law.
The original 2022 interagency statement was issued by the Federal Reserve, FDIC, NCUA, OCC, CFPB, HUD, DOJ, and FHFA. It reminded banks, credit unions and other creditors that the Equal Credit Opportunity Act and Regulation B permitted SPCPs designed to meet the credit needs of specified classes of borrowers and encouraged institutions to explore such programs consistent with fair lending and safety-and-soundness requirements.
The 2022 interagency guidance sought to assure lenders that SPCPs established to meet the needs of certain populations were legal under the Equal Credit Opportunity Act, or ECOA, which prohibits creditors from discriminating against applicants on the basis of race, sex and other factors. The Trump administration instead argues that federal law explicitly prohibits those considerations.
In the Federal Register notice, the agencies said “these prior interpretations cannot be reconciled with the statutory text of ECOA and the [Federal Housing Act], which expressly prohibit discrimination against individuals based on prohibited characteristics.” The notice also referenced Supreme Court precedent on race-conscious policies, arguing that a general desire to remedy societal discrimination does not satisfy legal standards for such programs.
HUD Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor said in a statement: “No regulation or interagency statement fixated on the Biden administration’s DEI commitments can defeat the Fair Housing Act’s categorical prohibition against discriminating on the basis of race and color in any residential real estate-related transaction.”
Timeline of SPCP policy changes
February 2022: Eight federal agencies issue interagency statement encouraging SPCPs
March 2025: FHFA Director Bill Pulte orders Fannie Mae and Freddie Mac to terminate SPCP support
April 2026: CFPB amends Regulation B, prohibiting for-profit lenders from using race, color, national origin, or sex as SPCP eligibility factors
June 2026: CFPB rescinds 2020 advisory opinion on SPCPs
August 2026: Seven agencies jointly rescind 2022 interagency guidance
Understanding SPCPs
What these programs were designed to do
Special purpose credit programs have existed since 1974 as a legal exception to anti-discrimination law.
SPCPs are targeted lending products designed to specifically advantage groups historically denied credit due to discrimination. While broader adoption of SPCPs didn’t occur until recently, the programs have been legal and allowable since 1974 due to a provision in the Equal Credit Opportunity Act to reverse centuries of unfair laws and practices.
The programs can take many forms, but the most common products included downpayment assistance, closing-cost assistance, and rate buydowns. Under federal law, lenders were permitted to design and implement SPCPs to extend credit to a class of persons who would otherwise be denied credit or would receive it on less favorable terms. The Equal Credit Opportunity Act and Regulation B permitted creditors to offer or participate in SPCPs through any credit assistance program authorized by federal or state law for the benefit of an economically disadvantaged class of persons; any credit assistance program offered by a non-for-profit organization for the benefit of its members or an economically disadvantaged class of persons; or any SPCP offered by a for-profit organization to meet special social needs, if it meets certain standards prescribed in regulation by the Bureau.
According to FHFA, in 2023, the GSEs acquired 14,968 mortgages originated through SPCPs. SPCPs still went through traditional underwriting and had to comply with Ability to Repay standards set by the Dodd-Frank Act.
The programs were particularly important for non-bank lenders, who originate the majority of mortgages today but lack the capital to hold loans on their own balance sheets. The majority of mortgages secured in the country today are originated by non-bank lenders without deposits to fund their own loans. Therefore, although lenders may continue to offer SPCP loans, the recent action by FHFA significantly dries up capital available for them.
The April rule change
How CFPB already restricted SPCPs earlier this year
The Consumer Financial Protection Bureau made sweeping changes to Regulation B in April 2026, setting the stage for this week’s rescission.
On April 22, 2026, the CFPB published its final rule amending Regulation B, the regulation implementing the Equal Credit Opportunity Act. The Final Rule made three key changes: it eliminated disparate impact analysis as grounds for enforcement actions; it extended protections against discriminatory lending practices to all borrowers, including businesses; and it mandated that special purpose credit programs cannot target beneficiaries based on race or ethnicity.
The Final Rule adopted a new provision that categorically prohibits for-profit organizations from offering an SPCP that uses characteristic of race, color, national origin or sex, or any combination thereof, as eligibility criterion. For-profit lenders can still use religion, marital status, age, or receipt of public assistance income as eligibility criteria, but with more stringent documentation requirements.
The Final Rule went into effect on July 21, 2026. The CFPB noted that SPCP credit extended before the effective date must comply with the rule in place at the time the SPCP was established, while SPCP credit extended on or after the effective date must comply with the new restrictions.
In April, the CFPB amended Regulation B to prohibit for-profit lenders from using race, color, national origin or sex as factors in determining eligibility for an SPCP. The Bureau subsequently rescinded a 2020 advisory opinion on the programs in June, saying parts of that guidance had become outdated and conflicted with the revised regulation. You can read the full text of the CFPB’s April 2026 final rule on the Federal Register’s website.
What lenders can and cannot do now
Prohibited for for-profit lenders: Using race, color, national origin, or sex as common characteristics to determine SPCP eligibility
Still permitted: SPCPs offered by non-profit organizations (including credit unions) for their members or economically disadvantaged classes; SPCPs targeting specific geographies or income levels without regard to prohibited characteristics; for-profit SPCPs using religion, marital status, age, or public assistance income (with stricter documentation)
Warning: Lenders should not rely on the rescinded 2022 guidance or related Biden-era issuances going forward
Impact on homebuyers
What this means if you’re trying to buy a house
The policy changes reduce—but don’t eliminate—options for borrowers who historically faced barriers to homeownership.
If you’re a first-time homebuyer or someone who has faced credit challenges, the rescission of SPCP guidance means fewer mortgage lenders will offer specialized programs with down payment or closing cost assistance tied to demographic characteristics. While Director Pulte’s announcement puts an end to SPCPs that would be available for purchase at the GSEs, it does not eliminate SPCPs entirely. In fact, the FHFA Director has no authority to eliminate SPCP loans that are not presented to the GSEs for purchase—lenders can still offer SPCPs on their own and fund them through their own capital.
However, not all lenders have the resources to hold these loans. The practical effect is that capital for such programs has dried up significantly. Programs offered by non-profit organizations, including credit unions, face fewer restrictions and may continue to operate with more flexibility than for-profit lenders.
Your best options now are to explore traditional down payment assistance programs that don’t rely on demographic characteristics, work with credit unions or community development financial institutions that may still offer targeted programs, or investigate state and local homebuyer programs that use income or geography as qualifying factors. Every state offers some form of assistance, typically geared toward first-time buyers who need financial help.
If you’re working on improving your financial position to qualify for a mortgage, focus on the fundamentals: building your credit score, saving for a down payment (even a small one—many programs accept 3% or less), and understanding your budget and what you can truly afford. The homebuying process remains accessible to many borrowers, even without specialized credit programs.
Bloomberg Law reported that lenders could face regulatory consequences for maintaining programs that conflict with the revised standards. This means lenders are likely to be cautious about continuing any programs that might run afoul of the new interpretation, even if technically permissible under the revised rules.
The broader context
GSE termination and the policy cascade
The interagency rescission follows FHFA’s March 2025 directive ending Fannie Mae and Freddie Mac participation in SPCPs.
On March 25, 2025, Federal Housing Finance Agency Director Bill Pulte released a directive eliminating the GSEs’ participation in Special Purpose Credit Programs. Director Pulte ordered Fannie Mae and Freddie Mac to terminate Special Purpose Credit Programs that they support. The directive described such programs as those that provide particular borrowers who lack adequate down payments for homes or the ability to cover mortgage closing costs assistance.
That March 2025 action was the first major domino to fall in the administration’s broader effort to roll back race-conscious and diversity-focused policies across federal agencies. The CFPB’s April 2026 Regulation B amendments followed, then the June rescission of the 2020 advisory opinion, and now this week’s joint rescission of the 2022 interagency statement completes the policy reversal.
Notice published in the Federal Register said the withdrawal of the Biden administration guidance was being executed in compliance with a series of executive orders President Donald Trump has signed during his second term aimed at deregulation and what the administration describes as “restoring equality of opportunity and meritocracy.”
According to the notice, an earlier version of Regulation B permitted creditors to implement lending programs based on the race, color, national origin or sex of the applicant under certain circumstances, and the 2022 interagency statement and related guidance referenced that earlier version. Similarly, assurances given with respect to conformity with the Fair Housing Act were based on HUD guidance that is no longer in effect.
The rescission became effective Tuesday, August 26, 2026, the day after it was published in the Federal Register. Lenders, housing counselors, and advocacy organizations are now adjusting to a regulatory landscape that has shifted dramatically from the approach taken during the Biden administration.
Quick answers
Special purpose credit programs: common questions
Can lenders still offer special purpose credit programs at all?
Yes, but with significant restrictions. Non-profit organizations including credit unions can still offer SPCPs with more flexibility. For-profit lenders can offer SPCPs but cannot use race, color, national origin, or sex as eligibility criteria as of July 21, 2026. They can use other characteristics like income level, geography, religion, marital status, age, or receipt of public assistance, but must meet stricter documentation requirements showing the program is necessary.
What happened to SPCPs that Fannie Mae and Freddie Mac used to support?
In March 2025, FHFA Director Bill Pulte ordered Fannie Mae and Freddie Mac to terminate their support for SPCPs. The GSEs acquired 14,968 SPCP mortgages in 2023, but can no longer purchase new loans originated under these programs. Lenders can still originate SPCP loans if they hold them in portfolio, but most non-bank lenders lack the capital to do so, effectively drying up much of the market for these products.
Does this affect state and local down payment assistance programs?
Not directly. State and local programs that provide down payment or closing cost assistance based on income, geography, or first-time buyer status—without using race, color, national origin, or sex as eligibility criteria—are generally unaffected. Every state offers some form of assistance for homebuyers. However, government entities face different legal standards than private lenders and must be careful with any race-conscious programs.
Why did the agencies rescind the 2022 guidance now?
The rescission follows the CFPB’s April 2026 amendments to Regulation B, which restricted how for-profit lenders can use SPCPs. The agencies said the 2022 guidance conflicted with the updated regulations and could no longer be reconciled with their interpretation of the Equal Credit Opportunity Act, the Fair Housing Act, and Supreme Court precedent on race-conscious policies. The action aligns with Trump administration executive orders focused on what officials describe as “restoring equality of opportunity.”
What should I do if I was planning to use an SPCP to buy a home?
Contact your lender immediately to understand whether the program you were considering is still available or has been modified. Explore alternative options including traditional down payment assistance programs offered by your state housing finance agency, FHA loans with low down payment requirements, credit union programs (which face fewer restrictions), and USDA or VA loans if you qualify. Many assistance programs based on income or geography remain fully operational.
Could lenders face penalties for programs they offered under the old guidance?
The CFPB stated that the Regulation B amendments apply prospectively—SPCP credit extended before July 21, 2026 must comply with the rule in place when the program was established, while new credit must comply with current rules. However, the Equal Credit Opportunity Act includes a safe harbor provision: lenders who relied in good faith on CFPB guidance in effect at the time cannot be held liable if that guidance is later rescinded or determined invalid. That said, regulators warned that lenders maintaining programs conflicting with revised standards could face consequences going forward.