The Washington Report

February 6, 2023

In This Issue

Affirmatively Furthering Fair Housing
Meta Implements New Housing Ads Platform After DOJ Fair Housing Settlement

Realtor Insider DC News and Events
GSEs Release New Radon Standards

Valuation Issues Update
NAR Joins Coalition Asking FHA to Collaborate with Other Regulators on New ROV Proposal


Affirmatively Furthering Fair Housing

Meta Implements New Housing Ads Platform After DOJ Fair Housing Settlement

On January 9, 2023, the U.S. Justice Department (“DOJ”) and the U.S. District Court for the Southern District of New York released further details of their discrimination settlement with Meta Platforms, Inc., formerly known as Facebook, Inc., over their housing ads delivery system’s violations of the Fair Housing Act (“FHAct”).

Last year, Meta entered into a settlement agreement with the DOJ over claims that their advertisement delivery algorithms violated the Fair Housing Act. The DOJ’s lawsuit was based on a 2018 investigation by the U.S. Department of Housing and Urban Development (“HUD”), which alleged that the platform allowed housing advertisers to use Facebook-created categories based on FHAct-protected characteristics in targeting or excluding the audience receiving housing ads.

Facebook had a “Special Ad Audience” tool which used protected categories to identify additional users with similar characteristics as an advertiser’s ideal audience – allowing targeting on the basis of race, religion, sex, and similar characteristics. Advertisers were also given the ability to exclude users from seeing their housing ads based on protected characteristics. And lastly, Facebook’s own internal ad delivery algorithms (which are inaccessible to both advertisers and users) used FHAct-protected characteristics to determine which consumers could see the advertisement.

As part of the settlement, Meta agreed to make significant changes to its housing ad delivery methods, including discontinuing the Special Ad Audience tool. The company also agreed to develop a new system for housing ads to address disparities between advertisers’ targeted audiences and the group of Facebook users who will actually be delivered the ads.

On January 9, 2023, Meta unveiled its new housing ad platform to address algorithmic discrimination (referred to as a “Variance Reduction System” or “VRS”). All housing advertisements on Facebook will now go through the VRS, which will be expanded later this year to include credit and employment ads.

Meta states that VRS works to combat discrimination by removing the ability of advertisers to target or exclude users based on personal characteristics, including age, zip code, and gender. The system will also aim to mitigate bias within the company’s internal algorithms by ensuring that all housing ads are distributed evenly across demographic groups. Meta plans to regularly review this tool to ensure that the ad audiences are in line with real-world demographic distributions, based on age, gender, and estimated race or ethnicity. Meta has also agreed to the DOJ’s follow-up compliance targets, which ensure that the company will be subject to court oversight and regular reviews until June 27, 2026.

​​“This development marks a pivotal step in the Justice Department’s efforts to hold Meta accountable for unlawful algorithmic bias and discriminatory ad delivery on its platforms,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “The Justice Department will continue to hold Meta accountable by ensuring the Variance Reduction System addresses and eliminates discriminatory delivery of advertisements on its platforms.  Federal monitoring of Meta should send a strong signal to other tech companies that they too will be held accountable for failing to address algorithmic discrimination that runs afoul of our civil rights laws.”

Olive Morris,, 202-383-1215
Alexia Smokler,, 202-383-1210

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Realtor Insider DC News and Events

GSEs Release New Radon Standards

The Federal Housing Finance Agency (FHFA) recently announced changes to Fannie Mae and Freddie Mac’s (the Enterprises) multifamily radon standards. NAR commented on this proposal in 2021 to express concerns about the cost and regulatory burden of these requirements. The new standards will go into effect for loan applications received after June 30, 2023:

  • Requiring radon testing at multifamily Enterprise-backed properties, regardless of property location, subject to some exemptions and deferrals.​
  • Increasing required testing from 10 percent of ground floor units to 25 percent of ground floor units.
  • Continuing to allow an environmental professional to manage the radon testing process.
  • Requiring the environmental professional or property representative to provide tenant notifications for radon testing.
  • Providing additional guidance for lenders and environmental consultants on the Enterprises’ radon standards. As part of such guidance, the Enterprises will reinforce the need for compliance with state and local radon laws.

Below are loans and areas not subject to radon testing:

  • Refinances of properties with existing Enterprise debt that have undergone previous radon testing and mitigation (if applicable) compliant with this policy.
  • Supplemental loans
  • Cooperatives
  • Manufactured Housing Communities
  • Properties with no ground-contact residential units (including properties with ground-floor retail, first-floor amenities/leasing, or residential units above parking garage or over code-compliant ventilated crawl space)
  • Upper-floor residential units
  • Any improvements that are not part of the collateral
  • Properties with property-wide radon mitigation systems and Operations and Maintenance (O&M) plans in place
  • New construction built with radon resistant measures
  • When the EP concludes that testing or mitigation is not necessary and reasons supporting this conclusion.
  • Small loans/Small Balance Loan (SBL) mortgages (deferred from testing until 2024, when it will be reassessed).

FHFA Insights Blog: FHFA Increases Radon Testing Requirements at Enterprise-Backed Multifamily Properties

Russell Riggs,, 202-383-1259
Erin Stackley,, 202-383-1150

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Valuation Issues Update

NAR Joins Coalition Asking FHA to Collaborate with Other Regulators on New ROV Proposal

NAR joined a group of industry and consumer groups in a response to the Federal Housing Administration's (FHA) request for comment on its proposed revision to a mortgagee letter on reconsideration of value (ROV).

This response is in addition to NAR's individual response to the FHA.

The coalition requests in the letter:

  1. A pause in the FHA's revision until they engage with other regulators to create a uniform policy;
  2. Efforts to Improve education with consumers about the ROV process;
  3. Clear guidance for all parties on the new rule; and
  4. Compliance with current law where the FHA would monitor for bias and share any concerns with enforcement agencies as well as other guarantor agencies and the government-sponsored enterprises (GSEs).

Ken Fears,, 202-383-1066
Jeremy Green,, 312-329-8404

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