Two fair housing organizations sued the Department of Housing and Urban Development on July 23, alleging the agency’s restructuring of a decades-old federal grant program would strip funding from more than 100 nonprofit fair housing enforcement groups nationwide and leave much of the country without organized fair housing enforcement.
The National Fair Housing Alliance (NFHA) and the Massachusetts Fair Housing Center (MFHC), represented by civil rights law firm Relman Colfax, filed the complaint in U.S. District Court for the District of Massachusetts against HUD and Secretary Scott Turner in his official capacity. The case is Massachusetts Fair Housing Center v. HUD, No. 3:26-cv-30117.
At issue are Notices of Funding Opportunity (NOFOs) HUD issued July 2 for fiscal year 2025 and 2026 appropriations under the Fair Housing Initiatives Program, a Fair Housing Act-authorized program that has funded a national network of nonprofit fair housing groups since 1992. According to the complaint, FHIP has historically split its appropriation roughly two-thirds to Private Enforcement Initiative (PEI) grants β funding for intake, investigation and enforcement work β about a quarter to Education and Outreach Initiative (EOI) grants, and the remainder to Fair Housing Organization Initiative (FHOI) grants that build capacity at newer organizations.
The complaint alleges the FY2025 NOFO breaks from that structure entirely: it provides zero funding for PEI or EOI grants for the first time in FHIP’s history, and instead directs $46 million of the $56 million appropriation to just five FHOI awards β including, the complaint says, a single $25 million award to one law school. The remaining $10 million would fund an Administrative Enforcement Initiative award to a state or local agency, a category the complaint says has not received FHIP money since 1995. The FY2026 NOFO does contemplate PEI and EOI awards, according to the complaint, but says funds would not be obligated until July 1, 2027 β a gap plaintiffs say many organizations cannot survive.
The complaint also alleges the NOFOs introduce new eligibility criteria, an overhauled merit-review process and a more subjective “risk review” that together would disqualify nearly all of the fair housing organizations the statute was written to fund, along with new requirements to comply with a list of executive orders the complaint calls vague and “potentially unlawful.” It says the changes would harm organizations that collectively handle roughly 75% of the nation’s fair housing discrimination complaints, including groups serving rural areas, low-income neighborhoods, veterans and people with disabilities. NFHA’s own current PEI grant runs out July 31, 2026, according to the filing, meaning the organization could go more than a year without enforcement funding.
The complaint frames the NOFOs as arbitrary and capricious under federal administrative law, arguing HUD provided no reasoned explanation for the restructuring and ignored decades of reliance by organizations that have received renewed FHIP funding on a near-annual basis. It seeks declaratory and injunctive relief; HUD had not filed a public response as of publication.
The lawsuit is, by its own description, the third fight over FHIP funding since early 2025. The complaint references HUD’s February 2025 attempt to cancel 78 existing FHIP grants, which a federal court blocked, and a separate court order that ended a subsequent delay in awarding new grants. Those earlier disputes came as HUD absorbed broader staffing reductions; RealtyWire previously reported on HUD’s 24% fiscal 2026 staffing cut in the context of new federal housing legislation.
What it means: The funding structure, dollar figures and timeline described above are drawn directly from the plaintiffs’ federal complaint, a public court filing β they are allegations, not adjudicated facts, and HUD has not yet responded in court. What is independently verifiable is that FHIP has funded PEI and EOI grants in some form every year since 1992, per the complaint’s own account of the program’s history, and that this is the third court fight over the program’s funding in roughly 18 months. What to watch: HUD’s response to the complaint and whether a judge grants preliminary relief before local fair housing groups’ current grant years lapse.
