Judge Orders Hud To Resume Allocation Of Fair Housing Funds

U.S. District Court Judge Sparkle Sooknanan issued a temporary order on Tuesday, mandating that the U.S. Department of Housing and Urban Development (HUD) allocate crucial federal fair housing funds nationwide.

The ruling is part of a federal class-action lawsuit initiated in June by the civil rights firm Relman Colfax PLLC, which represents the National Fair Housing Alliance (NFHA) and the Tennessee Fair Housing Council. 

“The irreparable harm analysis is fairly straightforward in this case. The Plaintiffs have explained that they will suffer several harms without a temporary restraining order,” Sooknanan stated in her ruling.

A spokesperson for HUD hasn’t replied to HousingWire’s request for comment. 

According to the order, HUD must disburse funding for the Fair Housing Initiatives Program (FHIP), established by Congress in 1987 during the Reagan administration. The lawsuit claims that HUD suspended these grants for the first time in 30 years, neglecting its mandate to expend congressionally appropriated funds.

FHIPs aim to support community-based, frontline organizations dedicated to promoting equal housing opportunities, stabilizing neighborhoods, investigating discrimination and more. They primarily assist seniors, disabled veterans, individuals with disabilities and others in securing housing opportunities free from discrimination.

According to the NFHA, some organizations are still awaiting funds and have had to lay off employees, cut crucial programs and compensate workers from their own resources in the meantime.

“Today’s decision is a crucial step in restoring the fair housing infrastructure that millions of people across the country rely on to challenge illegal housing and lending policies and practices and access justice,” Lisa Rice, the president and CEO of NFHA, said in a statement.   

The lawsuit asserts that HUD has been withholding funds meant for existing grants and failing to award new grants from ongoing application cycles. 

In her decision, Sooknanan ordered HUD to submit a status report by Aug. 4, detailing a comprehensive plan to fulfill its statutory obligations for new grants during the current fiscal year.

“In its August 4, 2025, status report, HUD should provide a specific timetable with anticipated completion dates for all the tasks that must be accomplished in order for grants to be obligated by September 30, 2025,” the judge explained.