National Fair Housing Alliance and the Tennessee Fair Housing Council File Federal Class Action Lawsuit for Unconstitutional Withholding of Fair Housing Funds 

By Kayla Blackwell, NLIHC Housing Policy Analyst and San Kwon, NLIHC Policy Intern  

On June 24, law firm Relman Colfax, PLLC filed a federal lawsuit on behalf of the National Fair Housing Alliance (NFHA) and Tennessee Fair Housing Council (TFHC) challenging HUD’s unlawful refusal to administer critical grant funding under the Fair Housing Initiatives Program (FHIP).  

FHIP was created in 1992 by Congress to support frontline organizations that defend, enforce, and advance fair housing laws and practices. Fair housing organizations have used FHIP funds to, for instance, stop insurance and lending redlining practices, support the development of housing units accessible for people with disabilities, target sexually abusive landlords, prevent homelessness for families with children, and more.  

HUD is now openly defying its FHIP mandate, refusing to spend congressionally appropriated funds. The withheld funds take the form of existing grants, as well as new grants from pending application cycles. All of this comes after more than thirty years of unbroken interdependence between HUD and fair housing organizations.   

“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 in a statement. “This is a civil rights emergency, and the government is standing by when it should be taking action.”   

The plaintiffs NFHA and TFHC allege that HUD’s refusal to administer FHIP grants violates the “Administrative Procedure Act” and the U.S. Constitution. Without FHIP funds, NFHA will no longer be able to launch a new fair housing organization in North Carolina to assist victims of the most recent natural disaster, as well as to educate communities about fair housing. TFHC has already ceased systemic investigations and begun staff terminations because HUD will not award grant funding. The loss of new grant funding threatens 85% of its operating budget, and the organization may be forced to close if funding is not restored. Many other fair housing organizations face a similar fate.  

“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 NFHA, in a statement.   

The harms from HUD’s refusal to administer FHIP funds are especially grave given the Trump Administration’s proposal to eliminate FHIP funding entirely from its FY26 budget.   

 Read NFHA’s press release here.  

Read the full complaint here.