24 C.F.R. § 100.125
§ 100.125 Discrimination in the purchasing of loans. (24 CFR Part 100)
Operative Text
(a) It shall be unlawful for any person or entity engaged in the purchasing of loans or other debts or securities which support the purchase, construction, improvement, repair or maintenance of a dwelling, or which are secured by residential real estate, to refuse to purchase such loans, debts, or securities, or to impose different terms or conditions for such purchases, because of race, color, religion, sex, handicap, familial status, or national origin. (b) Unlawful conduct under this section includes, but is not limited to: (1) Purchasing loans or other debts or securities which relate to, or which are secured by dwellings in certain communities or neighborhoods but not in others because of the race, color, religion, sex, handicap, familial status, or national origin of persons in such neighborhoods or communities. (2) Pooling or packaging loans or other debts or securities which relate to, or which are secured by, dwellings differently because of race, color, religion, sex, handicap, familial status, or national origin. (3) Imposing or using different terms or conditions on the marketing or sale of securities issued on the basis of loans or other debts or securities which relate to, or which are secured by, dwellings because of race, color, religion, sex, handicap, familial status, or national origin. (c) This section does not prevent consideration, in the purchasing of loans, of factors justified by business necessity, including requirements of Federal law, relating to a transaction's financial security or to protection against default or reduction of the value of the security. Thus, this provision would not preclude considerations employed in normal and prudent transactions, provided that no such factor may in any way relate to race, color, religion, sex, handicap, familial status or national origin.
Under § 100.125, entities that buy mortgage loans, debt instruments, or securities tied to residential real estate are prohibited from making those purchasing decisions—or setting different terms for them—based on protected characteristics such as race, religion, sex, disability, familial status, or national origin. This covers a range of secondary-market practices, including selectively buying loans from certain neighborhoods, packaging loan pools differently, or marketing mortgage-backed securities on unequal terms, when any of those distinctions trace back to protected characteristics. The rule does carve out room for legitimate, race-neutral business and financial considerations, such as credit risk or federal regulatory requirements, as long as those factors have no connection to protected class status.
Plain English — not legal advice.
Property owners and investors who participate in the secondary mortgage market should be aware that § 100.125 governs the conduct of loan purchasers and securitizers, not just originating lenders. Compliant secondary-market operators generally apply uniform purchasing criteria and pooling practices across all geographic areas and borrower profiles, ensuring that no underwriting or packaging decision is influenced by the protected characteristics of borrowers or neighborhoods. Landlords who believe a financing arrangement was affected by discriminatory loan-purchasing practices may find it useful to consult a housing attorney or contact HUD to understand how § 100.125 applies to their situation.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section § 100.125 means that the protections against housing discrimination extend beyond the lender who originally issued a mortgage—they also bind the investors and institutions that buy, pool, or securitize those loans in the secondary market. If a tenant or prospective homeowner suspects that discriminatory loan-purchasing practices affected their access to financing or the terms they were offered, they can file a fair housing complaint with HUD or a state fair housing agency, or raise the violation through other civil rights enforcement channels. Tenant-rights organizations and fair housing advocacy groups can help explain what evidence is relevant and what remedies may be available under § 100.125.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 3, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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