42 U.S.C. § 1437aaa–7
Limitation on selection criteria (THE PUBLIC HEALTH AND WELFARE (42 U.S.C.))
Operative Text
In establishing criteria for selecting applicants to receive assistance under this subchapter, the Secretary may not establish any selection criterion or criteria that grant or deny such assistance to an applicant (or have the effect of granting or denying assistance) based on the implementation, continuation, or discontinuation of any public policy, regulation, or law of any jurisdiction in which the applicant or project is located.
Under 42 U.S.C. § 1437aaa–7, the federal Secretary of Housing and Urban Development is prohibited from creating selection criteria for homeownership assistance that favor or exclude applicants based on the local, state, or other public policies, regulations, or laws in effect where the applicant or project is located. This means the presence, absence, or change of a local policy cannot be used as a basis—directly or indirectly—to grant or deny assistance. The rule is designed to keep federal assistance decisions neutral with respect to local policy choices.
Plain English — not legal advice.
Property owners and managers involved in projects seeking assistance under this subchapter should be aware that 42 U.S.C. § 1437aaa–7 bars the federal government from conditioning eligibility on the local regulatory environment surrounding a project. Compliant operators generally document their applications based on project-specific and applicant-specific factors rather than relying on the presence or absence of local ordinances as a qualification argument. Understanding this limitation can help operators frame their applications in ways that align with the criteria the Secretary is actually permitted to consider.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under 42 U.S.C. § 1437aaa–7, applicants for assistance have a right to have their applications evaluated free from criteria that penalize or reward them based on the public policies or regulations of their local jurisdiction. If an applicant believes they were denied assistance because of a local law or policy in their area, that concern may be raised as a potential violation of this provision through HUD's administrative complaint process or with a tenant-rights or housing-advocacy organization familiar with federal housing programs. Consulting a housing counselor approved by HUD or a legal aid organization can help applicants understand whether this provision may be relevant to their situation.
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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