A federal class action lawsuit has been filed against the U.S. Department of Housing and Urban Development (HUD) by civil rights law firm Relman Colfax PLLC on behalf of the National Fair Housing Alliance (NFHA) and the Tennessee Fair Housing Council (TFHC). The lawsuit challenges HUD’s refusal to administer vital grant funding under the Fair Housing Initiatives Program (FHIP), which has been crucial in supporting the fight against housing discrimination and promoting equal housing opportunities.
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Unlawful Withholding of Funds
The lawsuit alleges that HUD’s actions violate the Administrative Procedure Act and the U.S. Constitution. Since 1992, Congress has established FHIP to fund nonprofit organizations that investigate housing discrimination, educate communities, and enforce civil rights laws. However, HUD has been withholding funds, refusing to process existing grants, and failing to award new grants from pending cycles. The lack of these funds is forcing fair housing organizations to lay off staff, halt investigations, and turn away individuals experiencing discrimination.
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Impact on Fair Housing Organizations
Lisa Rice, President and CEO of NFHA, expressed concern over the devastating effects this has on vulnerable communities, including disabled veterans, seniors, survivors of domestic violence, and people of color. “The Trump Administration is refusing to abide by the budget appropriations decisions taken by Congress,” she said, stressing that these actions endanger civil rights protections and undermine efforts to expand homeownership and improve housing security.
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Loss of Promised Funding
The lawsuit highlights specific examples of harm caused by HUD’s actions. The NFHA is losing promised funding for its private enforcement initiative (PEI) grant, which helps serve vulnerable populations. Without this funding, NFHA is unable to provide services to those affected by housing discrimination, particularly in North Carolina, where they had planned to assist victims of a recent natural disaster. TFHC, meanwhile, is facing staff terminations due to the loss of its PEI grant, jeopardizing 85% of its operating budget.
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Broader Implications for Fair Housing Enforcement
The withholding of FHIP funding is not an isolated issue. It coincides with the Trump Administration’s proposal to eliminate FHIP funding entirely in the FY2026 budget. Moreover, HUD has failed to issue a Notice of Funding Opportunities (NOFO) for funds already approved by Congress in the FY25 budget, further disrupting fair housing enforcement efforts. In 2024, private local fair housing enforcement organizations processed over 75% of housing discrimination complaints, underscoring the essential role these groups play in ensuring equal access to housing.
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Legal and Moral Demands
Reed Colfax, Co-Managing Partner at Relman Colfax, emphasized that the law requires this funding, and beyond legal obligation, morality demands it. “When the government withholds critical civil rights funding, real people suffer,” Colfax stated, explaining that every day the government delays funding, lives and futures are at risk.
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Future of Fair Housing Enforcement
This case also coincides with another ongoing lawsuit filed by Relman Colfax and members of NFHA in Massachusetts, challenging HUD’s termination of FHIP grants. The outcome of these cases will have long-lasting implications for the future of fair housing enforcement in America and the protection of individuals’ civil rights in housing.
