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FHFA Director Sandra L. Thompson’s Statement on Best Practices For Adverse Action Notices for Renters


​​​​​​Across the housing market, landlords increasingly rely on tenant screening reports as part of their selection criteria, but research shows that these reports too often contain imprecise information, including inaccuracies in criminal and eviction records and credit history. Today, FHFA joins several other federal agencies, as part of its work with the Interagency Policy Council on Tenant Protections, to advance best practices in adverse action notices.

Under the Fair Credit Reporting Act (FCRA), all landlords or property managers are required to inform rental applicants of negative information from a consumer report that led to the rejection of a rental application or another action unfavorable to the applicant. This requirement is known as the adverse action notice.

When a multifamily borrower with an Enterprise-backed mortgage denies a rental application, FHFA strongly encourages the borrower to:

  • ​​​​Provide written adverse action notices to applicants; and
  • ​Provide applicants a copy of any consumer screening report relied on when making an adverse action determination.

A written notice paired with a report copy allows the borrower to demonstrate they have fulfilled their legal obligations under the FCRA, and also permits rental applicants to understand the basis for any denial, fully assert their rights with tenant screening companies, and more effectively correct their records.

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