USDA is an equal opportunity provider, employer, and lender.

Rural Development

Rural Housing Service

1400 Independence Ave, SW 

Room 5014-S 

Washington, D.C. 20250 

Telephone: (202) 692-0268

MEMORANDUM

DATE: May 15, 2023 

TO: Multifamily Housing Stakeholders 

Multifamily Housing Owners 

 Multifamily Housing Management Agents 

FROM: Joaquin Altoro 

 Administrator

 Rural Housing Service 

SUBJECT: Program Requirements and best practices regarding denial of 

admission in USDA Multifamily Housing (MFH) administered 

programs 

In January, the White House released a Blueprint for a Renter Bill of Rights, 

which articulated principles to increase fairness in the rental market, strengthen 

tenant protections, and encourage rental affordability. One of the principles 

focused on ensuring renters and rental applicants know their existing legal rights 

and protections. 

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 include inaccurate information, including inaccuracies in criminal and 

eviction records and credit history. If prospective renters are not given the 

opportunity to review and correct the information in these reports, then these 

renters may be repeatedly denied housing as a result of inaccurate information 

in their tenant screening reports. In addition, housing providers may miss 

opportunities to consider qualified applicants who would have made for quality 

tenants.

The goal of this outreach is to remind USDA MFH Owners (landlords and 

property managers) of relevant legal requirements around disclosing denials of 

admission to applicants and to share best practices around the use of tenant 

screening reports and the disclosure of the contents of those reports to tenants. 

For example, Owners must provide written notice of denial under USDA rules, 

and any housing provider that uses consumer reports to make adverse tenant 

decisions must provide adverse action notices under the Fair Credit Reporting 

Act (FCRA). The most efficient way to comply with both obligations is to 

include the FCRA notice in writing as part of the denial letter that Owners are 

required to send to denied applicants. USDA strongly encourages Owners to 

provide the FCRA notice in writing as a way to demonstrate to USDA 

compliance with the notice requirements. 
Notice Obligations for Denial of Admission within the USDA MFH Program

The MFH Program requires that Owners must promptly notify any applicant determined to be 

ineligible for admission and must provide the applicant an opportunity to respond to the denial 

notice within ten calendar days after the date of the denial notice.1

Owners must send a notice of denial to an applicant who is denied admission, which: 

• Clearly states the reason for the denial; 

• States the time period and process for requesting an informal hearing; 

• Provides notice to the applicant that a person with a disability has the opportunity to 

request a reasonable accommodation; and

• Provides notice of the mandatory VAWA Notice of Occupancy Rights, along with form 

HUD-5382.2

Owners have additional regulations regarding the denial of admission based on criminal 

conviction records3

; status as a victim of domestic violence, dating violence, sexual assault, or 

stalking4; and civil rights and antidiscrimination laws.5 For more detailed information, please 

refer to the USDA Handbook-2-3560 Asset Management Handbook Chapter 6 on Project 

Occupancy. 

Notice Obligations under FCRA

Under FCRA, all landlords or property managers are required to inform rental applicants when 

information from a consumer report played a role in them rejecting a rental applicant or taking 

another action unfavorable to the applicant, such as requiring a co-signer or deposit that would 

not be required for another applicant. This requirement is known as the adverse action notice. 

Failure to provide the notice correctly may subject landlords and property managers to legal 

liability under state and federal law. As Federal Trade Commission guidance explains, the 

adverse action notice must communicate the following information: 

• the name, address, and phone number of the tenant screening company 

• that a consumer can receive a free copy of the report from the tenant screening company 

within 60 days 

• that a consumer has the right to dispute any information that is incorrect 

• that the tenant screening company did not make the decision to take the unfavorable 

action and cannot give the specific reason for it 

1 See 7 CFR § 3560.154(h) and 3560.160(e). 2 See 24 CFR § 5.2005(a), and Handbook 2-3560, Attachment 6-K. 3 See 7 CFR § 3560.154(j); 24 CFR § 5.854; § 5.855; § 5.856 and § 5.857, as well as Handbook 2-3560, Chapter 6, 

Project Occupancy.

4 See 24 CFR § 5.2005(b).

5 Relevant civil rights and antidiscrimination laws include the Fair Housing Act, Title VI of the Civil Rights Act of 

1964, Section 504 of the Rehabilitation Act of 1973 (Section 504), the Age Discrimination Act of 1975, the 

Americans with Disabilities Act of 1990 (ADA), as well as the nondiscrimination and equal opportunity provisions of 

7 CFR § 3560.2. 
The Consumer Protection Financial Bureau and the Federal Trade Commission, two federal 

agencies, interpret and enforce this requirement of the Fair Credit Reporting Act. They have 

additional resources Owners can review here. 

Recommended Best Practices

When an Owner denies an applicant, USDA requires the Owner to provide a written adverse 

action notice to the applicant as part of the denial letter. USDA also strongly encourages Owners 

to provide a copy of any consumer screening report you relied on when making an adverse action 

determination to an applicant. A written notice paired with a report copy allows Owners to 

demonstrate they have fulfilled their legal obligations under the Fair Credit Reporting Act, and 

also permits applicants to understand the basis for any denial, fully assert their rights with tenant 

screening companies, and more effectively correct their records. 

USDA also reminds landlords participating in the Rural Development Voucher Program of their 

obligations to provide adverse action notices to applicants to whom they deny housing based on 

information contained within that applicant’s consumer report. Note that FCRA requirements 

apply to both their assisted and unassisted tenants.