How to Avoid Discrimination When Rejecting Applicants Because They Have a Criminal Record

On Nov. 25, 2026, HUD published a letter (the “HUD Letter”) revoking previous guidance advising landlords how to perform criminal background checks on rental applicants without committing discrimination. The HUD Letter says that the guidance was confusing and had a chilling effect on criminal background checking and other building security measures. In revoking the guidance, HUD is assuring owners that they can and must do what’s necessary to keep their sites safe and free of crime without fear of getting sued or investigated for discrimination. 

Unfortunately, it’s not as simple as that. Revoking guidance doesn’t change the law or the fact that criminal checks and other security measures may still run afoul of discrimination laws. Here’s a look at the liability risk and the seven things you can do to manage it. 

What the Law Says

The federal Fair Housing Act (FHA) makes it illegal to refuse to rent or deny a person housing because of their race, color, religion, sex, handicap (disability), familial status, or national origin. It doesn’t say anything about criminal history or background. However, statistics show that African Americans and Hispanics are arrested, convicted, and incarcerated at disproportionately higher rates than whites. 

Result: Courts have consistently ruled that excluding rental applicants or tenants just because they have a criminal record may violate the FHA ban on racial and national origin discrimination. Criminal history or record is also a protected class under some state and local fair housing laws, including Connecticut, Illinois, and the District of Columbia.

Impact of the HUD Letter

The guidance the HUD Letter revokes recognized the fair housing liability risks associated with criminal record screening and explained what owners could do to ensure compliance. That guidance is now gone. The problem is that the underlying liability risk remains. The HUD Letter won’t stop states, municipalities, advocacy organizations, and individuals from suing owners who use criminal checks to exclude minorities, whether deliberately or inadvertently, for discrimination. And when those cases go to court, the judges will still rely on the same jurisprudence it always has to determine the owner’s liability.

7 Ways to Minimize Liability Risk 

Nobody is saying that you should stop performing criminal background checks. On the contrary, HUD regulations expressly require federally assisted landlords to not admit persons who’ve been convicted of certain offenses or pose a danger to health or safety. The takeaway is that you can’t lower your guard and must continue to ensure that your criminal record-checking rules and procedures comply with fair housing laws. Here are seven ways to do that. 

1. Establish reasonable & nondiscriminatory rental criteria. Owners have every right to establish policies governing who may live at their sites, as long as those standards are fair, reasonable, and nondiscriminatory—that is, they apply equally to all applicants regardless of race, color, etc. Such criteria include protecting their property and tenants’ safety. 

2. Establish reasonable, nondiscriminatory protocols for criminal record checks. Courts have long recognized landlords’ rights to perform background screening to ensure applicants meet their legitimate criteria. As the HUD Letter notes, landlords have “broad discretion to screen for suitability of tenancy or program participation for all relevant circumstances, including a history of criminal activity which would adversely affect the health, safety, and peaceful enjoyment of the property.” The principal liability risk stems from the housing decisions you make based on the results of your screening.

3. Don’t impose a blanket ban on applicants with a criminal record. Rejecting a rental applicant because of a criminal record may or may not be illegal. It all depends on the crime and circumstances involved. That’s why implementing pre-determined, blanket rules that treat all criminal activity the same, such as automatically rejecting any applicant with a criminal record, is highly problematic. 

4. Reject based on criminal convictions, not arrests. In general, rejecting on the basis of criminal record is justified only when applicants have actually been convicted of a crime; merely being arrested isn’t enough. An arrest, on its own, is merely an accusation and doesn’t prove that the person did anything wrong. Many people who get arrested are acquitted; others get their charges dropped and don’t even go to trial. Because arrest records don’t show whether the individual was prosecuted, convicted, or acquitted of the charges, relying on them isn’t reliable basis for determining whether the individual poses a potential risk to safety, health, and quiet enjoyment. 

5. Distinguish between dangerous & non-dangerous convictions. While more significant than an arrest, a conviction alone isn’t enough to show that an individual poses a potential risk to safety, health, or quiet enjoyment. So, it’s imperative to distinguish between criminal conduct that does and doesn’t rise to that level. Factors to consider: 

• Whether the individual was convicted of a felony or misdemeanor;
•  The type of felony the individual was convicted of—attorneys suggest that crimes posing a substantial risk to safety, health, and quiet enjoyment would generally include illegal manufacture or distribution (but not mere possession) of drugs and other specified controlled substances, sexual assaults, violent crimes like homicide, assault and battery, domestic violence, robbery and false imprisonment, and crimes causing significant damage to property like arson or vandalism; and
• How long ago the felony was committed—based on court cases, seven years is the unofficial window (exception: according to attorneys, the one crime that doesn’t have a shelf life is sexual assault). 

6. Apply your screening policy consistently. Having legally sound screening criteria and procedures won’t help if you apply them inconsistently. The biggest danger is treating people with comparable criminal histories differently based on their race, national origin, etc. 

Example: A federal court ordered a Tennessee community and its property management company to pay $42,250 in damages for selectively applying its policy of disqualifying people with felony convictions to minority applicants. The evidence showed that the defendants denied an African American applicant because of his criminal record while approving the applications of two white applicants with similar and what should have been disqualifying felony convictions [U.S. v. Dyersburg Apartments, Ltd., (W.D. Tenn.), Aug. 13, 2019].   

7. Establish criteria for termination of assistance for criminal behavior. In addition to criminal records checking, the HUD Letter says that owners should “continuously monitor for criminal activity and take steps to immediately act if information is found that could result in a termination of tenancy.” It recommends establishing standards for termination of assistance for households if individuals within the households: 

• Engage in illegal drug use or have a pattern of drug use that threatens the health, safety, or peaceful enjoyment of the property;
• Have been convicted of production of methamphetamine in federally assisted housing;
• Engage in drug-related criminal activity;
• Engage in violent criminal behavior; or 
• Are abusing alcohol.