In May 2022, Redfin settled a lawsuit with the National Fair Housing Alliance (NFHA) for $4 million over allegations that its minimum home price policy — which determined whether Redfin would offer brokerage services to buyers and sellers in a given area — disproportionately denied service to communities of color. The practice was described as "digital redlining" because an algorithmic policy, rather than a human agent, determined who received service.

The NFHA alleged that Redfin's minimum home price thresholds, enforced algorithmically, had the effect of concentrating service in predominantly white neighborhoods while denying it in communities of color, regardless of individual agent intent. The settlement acknowledged that increasing reliance on algorithms in brokerage policies can produce unintended discriminatory effects. Following the settlement, Redfin removed crime data from its platform (announced in 2021, before the settlement), built Fair Housing guardrails into all subsequent AI tools, and committed to expanded service in underserved markets. This case directly influenced how Redfin approached responsible AI development in all subsequent tools.