Housing and Urban Development (HUD) Secretary Ben Carson wants to roll back an Obama-era rule mandating that single-sex homeless shelters funded by his department admit residents based on their stated gender identity instead of their sex at birth, arguing that people could intentionally misrepresent their gender for malicious reasons.

In a new rule posted online on Wednesday, HUD said it wants to give the shelters it funds flexibility in devising their own policies for admissions at single-sex or sex-segregated shelters.

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A senior HUD official told Fox News: “The federal government doesn’t need to be the bathroom police.”

HUD said the change is needed because the Equal Access Rule under the Obama administration “leaves no room for shelter providers to make decisions about potentially dangerous individuals who may misrepresent their gender to access gender-specific shelters.”

“Further, HUD’s current rule does not consider the practical concerns of shelter providers who serve vulnerable clientele in difficult conditions, including those seeking refuge from abusive relationships or domestic violence,” reads a department fact sheet, obtained by Fox News.

The 2016 Equal Access Rule guarantees housing and shelter programs regardless of sexual orientation or gender identity. According to a fact sheet, HUD’s newly proposed rule would "allow local providers to apply their own state and local laws in determining the best approach to serve individuals based upon their gender identity.”

The proposed rule would permit shelter providers to consider a range of factors when it comes to determining a person’s sex, including “privacy, safety, practical concerns, religious beliefs, any relevant considerations under civil rights and nondiscrimination authorities, the individual’s sex as reflected in official government documents, as well as the gender which a person identifies with.”

But transgender activists said they fear it'll result in transgender people being denied equal access to shelters.

“This is a heartless attack on some of the most vulnerable people in our society,” said Mara Keisling, the executive director of the National Center for Transgender Equality. “The programs impacted by this rule are life-saving for transgender people, particularly youth rejected by their families, and a lack of stable housing fuels the violence and abuse that takes the lives of many transgender people of color across the country.”

HUD said it would continue the department’s policy of “ensuring that its programs are open to all eligible individuals and families regardless of sexual orientation or gender identity.”

The department also argued that the rule change would provide flexibility for faith-based shelter providers, saying the current rule might discourage them from seeking HUD funding because of their religious beliefs.

The department cited a lawsuit against Naomi’s House, a California homeless shelter that receives HUD funding, where nine women claimed a biological male who identified as a female made lewd comments as he showered with the other residents. The department said the Obama-era rule did not give the shelter the ability to consider a different shelter for the resident.

The proposed rule change came as Carson weathered harsh criticism this week from Democrats during an appearance before the House Financial Services Committee, as he fielded questions about a proposed rule change that would strip public housing assistance for illegal immigrants. Carson has also been hammered for confusing a question about REOs – real estate owned properties – for Oreos, the chocolate cookies.