- A federal judge blocked HUD’s fiscal 2025 restructuring of $56M in Fair Housing Initiatives Program funding.
- HUD had planned to direct about $46M into five awards ranging from roughly $5M to $25M.
- The order restores the fiscal 2024 structure, while challenges to HUD’s fiscal 2026 funding notices remain unresolved.
A federal judge blocked HUD from consolidating $56M in fair housing grants, according to Globe St. The proposed structure centered on a small group of large awards. US District Judge Myong J. Joun issued a temporary restraining order on Aug. 26. The ruling directs HUD to use its fiscal 2024 structure for the fiscal 2025 appropriation.
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Fair Housing Grants Face Structural Changes
HUD proposed putting about $46M into five Fair Housing Organizations Initiative awards ranging from roughly $5M to $25M. Another $10M would have gone to state and local agencies through an Administrative Enforcement Initiative. The plan provided no fiscal 2025 funding for the Private Enforcement Initiative or Education and Outreach Initiative. Private enforcement grants historically represented about 62% of annual program funding, according to the court order.
The Details
The structure would have made most existing fair housing organizations ineligible for the new awards. A grant could not exceed 50% of a recipient’s operating budget. The smallest award exceeded $5M over two years. Applicants therefore generally needed annual budgets of at least $5M. The court order said most existing organizations operate with annual budgets between $400K and $2M.
Court Rejects HUD’s Rationale
HUD described the changes as a modernization effort meant to broaden participation and improve enforcement. Joun found the agency’s factual explanation insufficient. He also said HUD failed to account for nonprofits’ reliance on existing funding. The ruling follows the challenge to HUD’s funding structure from the National Fair Housing Alliance and Massachusetts Fair Housing Center.
Why It Matters
The funding supports complaint intake, discrimination investigations, testing, counseling, dispute resolution, and public education. The Massachusetts Fair Housing Center said federal private enforcement funds provide about half its $800K annual budget. Without fiscal 2025 funding, the group said it would stop taking new legal and housing-search clients. It also expected to lay off about half of its eight full-time employees. Other organizations warned of possible closure.
What’s Next
The underlying lawsuit remains pending. The order does not resolve the plaintiffs’ separate challenge to HUD’s fiscal 2026 funding notices. Because the fiscal 2025 appropriation expires Sept. 30, Joun ordered the department to return to the prior structure rather than start another planning process.
