Four nonprofit fair housing organizations representing a proposed class of more than 60 groups across the country recently filed a sweeping federal class action lawsuit challenging HUD and the newly created Department of Government Efficiency (DOGE) for abruptly terminating $30 million in federal grant funding. These funds were issued through HUD’s Fair Housing Initiatives Program (FHIP), a longstanding source of support for organizations fighting housing discrimination.

The funding cancellations came via identical form letters sent to grantees across 33 states. These letters cited Executive Order 14158 and stated the action was taken “at the direction of the Department of Government Efficiency,” asserting that the grants “no longer effectuate the program goals or agency priorities.” The letters offered no opportunity for grantees to respond or correct any alleged deficiencies, and provided no specific explanation of how the programs had failed to meet HUD’s priorities. 

The lawsuit accuses HUD and DOGE of acting unlawfully and without explanation, terminating “78 FHIP grants, a primary source of funding for fair housing organizations in 33 states.” And as a result of the termination, the “advocacy, enforcement, education and outreach, counseling, and training that has been a bulwark against housing discrimination and segregation for decades was immediately and suddenly compromised.” According to the plaintiffs, the cancellations violate both the statutory purpose of the FHIP and the Administrative Procedure Act (APA), which requires federal agencies to offer reasoned justification for decisions and follow fair procedures when terminating funding.

FHIP’s Role in Fair Housing Enforcement

The Fair Housing Initiatives Program (FHIP) has long served as a central mechanism through which HUD supports community-based organizations in advancing the goals of the Fair Housing Act. The program was established in the late 1980s and made permanent by Congress in 1992. FHIP provides critical funding to nonprofit groups that investigate allegations of housing discrimination, educate the public and housing providers, and enforce fair housing protections.

FHIP grants are structured to support three primary areas of private enforcement initiatives, education and outreach, and the development or expansion of fair housing organizations, particularly in underserved regions. The work carried out under these grants is often the frontline of fair housing enforcement, especially in communities where federal and state agencies have limited reach or resources.

Over the decades, FHIP has enabled nonprofit organizations to assist tens of thousands of individuals annually, addressing discrimination based on race, national origin, disability, family status, and other protected characteristics. It has also played an essential role in identifying emerging discriminatory practices that lead to broader policy reforms. 

Historically, HUD has acknowledged the value of FHIP-funded activities. Past studies affirmed that FHIP grantees significantly enhance HUD’s ability to enforce the Fair Housing Act, often contributing investigative evidence and legal support that would otherwise be unavailable.

Next Steps in Court

The consequences of HUD’s actions have been immediate. The four named plaintiffs are Massachusetts Fair Housing Center (MA), Intermountain Fair Housing Council (ID), Fair Housing Council of South Texas (TX), and the Housing Research and Advocacy Center (OH). Each has been forced to lay off staff, suspend programming, or prepare for potential closure.

The class action lawsuit seeks reinstatement of all terminated grants, judicial confirmation that HUD’s actions were unlawful, and a permanent injunction preventing future interference from DOGE or similar political directives. On March 27, a federal judge in Massachusetts ordered HUD to release the $30 million in withheld FHIP grants. As a result, the plaintiffs have shifted strategy, seeking an injunction solely against HUD for now while pursuing a separate legal challenge against DOGE.