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Genome-wide association studies (GWAS) have identified a large number of disease-associated SNPs, but in few cases the functional variant and the gene it controls have been identified. To systematically identify candidate regulatory variants, we sequenced ENCODE cell lines and used public ChIP-seq data to look for transcription factors binding preferentially to one allele. We found 9962 candidate regulatory SNPs, of which 16 % were rare and showed evidence of larger functional effect than common ones. Functionally rare variants may explain divergent GWAS results between populations and are candidates for a partial explanation of the missing heritability. The majority of allele-specific variants (96 %) were specific to a cell type. Furthermore, by examining GWAS loci we found >400 allele-specific candidate SNPs, 141 of which were highly relevant in our cell types. Functionally validated SNPs support identification of an SNP in SYNGR1 which may expose to the risk of rheumatoid arthritis and primary biliary cirrhosis, as well as an SNP in the last intron of COG6 exposing to the risk of psoriasis. We propose that by repeating the ChIP-seq experiments of 20 selected transcription factors in three to ten people, the most common polymorphisms can be interrogated for allele-specific binding. Our strategy may help to remove the current bottleneck in functional annotation of the genome.Electronic supplementary materialThe online version of this article (doi:10.1007/s00439-016-1654-x) contains supplementary material, which is available to authorized users.