Federal Class Action Filed Against HUD for Unconstitutional Withholding of Fair Housing Funds
FOR IMMEDIATE RELEASE:
Federal Class Action Filed Against HUD for Unconstitutional Withholding of Fair Housing Funds
Washington, D.C. — Today, Relman Colfax PLLC, a leading civil rights law firm dedicated to fighting for justice and equity, filed a federal lawsuit on behalf of the National Fair Housing Alliance (NFHA) and the Tennessee Fair Housing Council (TFHC) challenging the U.S. Department of Housing and Urban Development’s (HUD) unprecedented and unlawful refusal to administer critical grant funding under the Fair Housing Initiatives Program (FHIP). Filed in the United States District Court for the District of Columbia, the case directly challenges the Administration’s defunding of important federal housing enforcement.
Established in 1992, Congress created FHIP to support the frontline organizations that investigate discrimination, educate communities and housing providers on fair housing laws, and enforce civil rights laws. Nonprofit groups have used FHIP funds to stop insurance and lending redlining practices; support the development of accessible housing units for people with disabilities; bring to heel landlords who sexually harass women; prevent homelessness for families with children; and much more. Despite more than thirty years of unbroken interdependence between the federal government and fair housing organizations, HUD is now flouting its FHIP mandate by refusing to spend congressionally appropriated funds. These funds are essential for ensuring equal housing opportunity for all. HUD is refusing to administer a large number of existing grants and failing to award new grants from pending application cycles.
“Fair housing organizations around the country are being forced to lay off staff, close investigations, and turn away people experiencing discrimination,” said Reed Colfax, Co-Managing Partner at Relman Colfax. “This is a civil rights emergency, and the government is standing by when it should be taking action.”
“As Dr. Martin Luther King stated, ‘justice delayed is justice denied.’ The Trump administration has been intentional in its efforts to chip away at, delay and deny critical civil rights that are codified into law. Fair Housing has always enjoyed strong bipartisan support but now, the Trump Administration is refusing to abide by the budget appropriations decisions taken by Congress, which it is required to do. Allowing these actions to go unchecked is dangerous for our country and disastrous for the thousands of vulnerable individuals and families, including disabled veterans, seniors, survivors of domestic violence, families with children, people of color and others throughout the nation, who are left without key fair housing protections,” said Lisa Rice, President and CEO of the National Fair Housing Alliance. “The Administration’s retrenchment of support for fair housing impedes efforts to increase the supply of fair and affordable housing, expand homeownership access, and improve housing security,” Rice added.
The plaintiffs, NFHA, a non-profit organization dedicated to ensuring everyone has access to quality housing in healthy communities that are free from discrimination and representing more than 70 nonprofit members, and TFHC, a Nashville-based fair housing group working to eliminate housing discrimination for Tennesseans, allege that HUD’s refusal to implement or award FHIP grants violates the Administrative Procedure Act and the U.S. Constitution.
NFHA is losing promised funding due to HUD’s refusal to initiate the second year of its private enforcement initiative (PEI) grant, jeopardizing services for vulnerable people nationwide. Because HUD refuses to make new FHIP awards, NFHA is also losing the chance to compete for funds that it would use to help launch a new fair housing organization in North Carolina to assist victims of the most recent natural disaster, as well as funds it would use to educate communities about fair housing. TFHC has already ceased systemic investigations and will begin staff terminations at the end of June because HUD will not award it a new PEI grant as expected. The loss of a new grant threatens 85% of its operating budget, and the organization may be forced to close if funding is not restored. Many other organizations face a similar fate, leaving tens of millions of promised funding undistributed and communities throughout our nation vulnerable to housing discrimination and the potential of many people to end up homeless.
“For the past 30 years, TFHC has steadfastly worked for housing justice in Tennessee. We’ve not only helped clients remedy housing discrimination but also engaged in education to prevent housing discrimination,” said Martie Lafferty, TFHC’s Executive Director. “We’re heartbroken that HUD’s failure to award new FHIP grants is causing TFHC to cut services and are extremely concerned about the impact on potential clients and the community.”
These harms are especially severe given the recent proposal from the Trump Administration to eliminate FHIP funding entirely in the FY2026 budget, a move that underscores the stakes of this case for the future of fair housing enforcement in America. Moreover, the Trump Administration has not taken steps to issue a Notice of Funding Opportunities (NOFO) for funds approved by Congress in the FY25 budget, further jeopardizing fair housing access for people throughout the nation. Private local fair housing enforcement organizations processed over 75 percent of complaints of housing discrimination based on the most recent data in 2024. This case also coincides with a current complaint brought by Relman Colfax and members of NFHA in March of this year in the United States District Court for the District of Massachusetts against HUD for the abrupt and unjustified termination of grants under FHIP.
“The law requires this funding, but beyond that, morality demands it. When the government withholds critical civil rights funding, real people suffer. These are families denied justice, communities stripped of protection, and frontline organizations forced to go dark. Every day that passes without support puts lives, rights, and futures at risk,” said Colfax.
Read the full complaint here.
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The National Fair Housing Alliance (NFHA) is the country’s only national civil rights organization dedicated solely to eliminating all forms of housing and lending discrimination and ensuring equal opportunities for all people. As the trade association for 200 fair housing and justice-centered organizations throughout the U.S. and its territories, NFHA works to dismantle longstanding barriers to equity and build diverse, inclusive, well-resourced communities.