This technology enables a dynamic host configuration protocol (“DHCP”) Layer 2 relay in a Virtual Extensible Local Area Network (“VXLAN”) overlay fabric. A host device broadcasts a configuration request, such as a DHCP discover, across an Ethernet virtual private network (“EVPN”) overlay fabric. The DHCP discover is intercepted by a VXLAN Tunnel End Point (“VTEP”) device with Layer 2 bridging functionality. The VTEP device selects a centralized gateway (“CGW”) device with Layer 3 relay functionality as a destination for the DHCP discover. The VTEP device encapsulates the DHCP discover with a unicast VXLAN header comprising the media access control (“MAC”) address of the CGW device and transmits the encapsulated DHCP discover to the CGW device, resolving the destination address associated with the broadcast. The CGW device transmits the DHCP discover to an Internet Protocol (“IP”) address associated with a DHCP server that is external to the EVPN overlay fabric.