DOGE cuts to fair housing grants hit HOME for financial advisor

Yahoo

08-04-2025

The Trump administration's possible termination of tens of millions of dollars in funding for fair housing organizations could make building wealth through homeownership more difficult.
That's the warning shared last month by Andrew Tudor, an investment advisor with Philadelphia-based Zenith Wealth Partners, about the potential impact of the U.S. Department of Housing and Urban Development's planned cuts to Fair Housing Initiatives Program grants under the recommendations of the agency's Department of Government Efficiency task force. One of 66 organizations slated to lose more than $30 million across 78 grants is Housing Opportunities Made Equal of Greater Cincinnati, a nonprofit group that Tudor credited for helping his parents gain approval for a mortgage they used to buy their family's home in 1985.
"It's pretty commonly known that the bedrock of the American Dream and financial success is homeownership," Tudor said in an interview. "Having enforcement around equal housing is extremely important."
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Through a class action lawsuit, the National Fair Housing Alliance won a temporary victory last month reinstating the grants — but their fate is in limbo amid an array of court cases over moves by President Donald Trump's cabinet and Elon Musk's DOGE teams to pull back spending on programs they deem to be wasteful outlays for diversity, equity and inclusion.
For the advocates, the HUD grant cancellations represent an existential threat to civil rights programs under the Fair Housing Act that target discrimination against women, people with disabilities and Black, Hispanic and other minority tenants or homebuyers that exacerbates race-based disparities and other wealth gaps. In addition, they argue that HUD violated the Administrative Procedure Act's ban on arbitrary and capricious decisions.
"The impact of this sudden loss of funding to the class members has been immediate and severe for the organizations, their communities, and the principle of fair housing that has been a guiding light for the nation's policies since 1968," the Alliance's March 13 filing stated. "Housing discrimination continues while DOGE and HUD pull the plug on a primary statutory means of redressing it."
That concern resonated especially strongly for Tudor, who told the story two years ago in a LinkedIn article of how his parents, Sharon Johnson and Fred Tudor, secured the mortgage for their family's home in the Avondale neighborhood. Even though they had full-time jobs with the U.S. Postal Service, excellent credit and combined annual income that was larger than the total amount of the loan, the local bank denied them a mortgage, according to Tudor, who is Black.
Housing Opportunities Made Equal (HOME) sent in a white couple as "testers," and the bank approved that couple's loan. After the organization contacted the bank, Tudor's parents qualified for the mortgage — and the house enabled the family to build generational wealth.
"This home has been a pillar in my life and in the lives of my immediate and extended family," Tudor wrote. "It has been one of the tools that we used to provide financial stability for so many, and it almost never was. We talk about the racial wealth gap like it just happened, but it was very intentional. The banks, insurance companies, regulators, legislators and appraisers all played a huge role in its creation and perpetuity. The local, state, and federal governments meticulously orchestrated this racial wealth gap, and the recent stories of stolen home equity through race-biased appraisals and lending practices signal that we will not be closing this gap anytime soon."
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Representatives for HUD didn't respond to inquiries about the lawsuit and funding for fair housing organizations like those of HOME. In a video posted last month to the social media platform X with the caption "Let's set the record straight," Secretary Scott Turner said that HUD has "taken inventory of every program and process to determine when and where the department can be more efficient in the delivery of its statutorily required programs." He pushed back against news reports suggesting that HUD is cutting homeless prevention services, closing field offices en masse or taking away resources from public housing authorities.
"I know that you're thinking, 'Are HUD-funded programs going to stop?'" he said. "The short answer is, 'no,' but things are definitely going to look a little bit different. Here's what our actions will and will not do: We will not slow down the department's mission-critical functions."
In the case filed by the equal housing organizations in Boston federal court, lawyers for the agency argued that the fair housing programs "confer significant discretion in determining how best to allocate appropriate funds across applicants."
"The statute does not constrain the secretary's discretion to determine how best to allocate the funding for each program among many different potential grant recipients," HUD's filing stated. "The Department's decisions in this context are discretionary decisions regarding how to allocate funds, not subject to arbitrary-and-capricious review under the APA."
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The March 21 filing included a declaration by the career HUD official who sent the organizations the letter informing them of the termination of their funding. The DOGE team at HUD had cited their programs as incompatible with a half dozen executive orders, such as those "ending radical and wasteful government DEI programs and preferences" and "ending illegal discrimination and restoring merit-based opportunity."
"HUD's internal DOGE task force specifically identified that those particular 78 awards were incompatible with one or more of the above executive orders because those awards include language that specifically imposes DEI, DEIA, and/or 'equity' actions, initiatives, plans, programs, grants, contracts, performance requirements, or preferences; and further authorizes the use of federal funds for training, enforcement, and other related activities in a manner for activities beyond the scope of the statutorily enumerated protections of the Fair Housing Act and other civil rights laws," the HUD career senior executive, Matthew Ammon, wrote.
"The task force further identified that the use of federal funds for purposes beyond the specific scope of these statutes dilutes and diminishes the availability of federal funds to carry out the specific, statutorily-authorized functions of the Department," he continued. "And the task force identified that the Department is best able to meet its statutory duties under the Fair Housing Act and other civil rights laws by the termination of these awards and the refocus of efforts toward effectuating the plain language of these statutes."
Those terminations represent "only a subset of the total number of open FHIP awards, as HUD's award-by-award review determined that not all open FHIP awards are inconsistent with executive orders and no longer effectuating program goals or agency priorities," Ammon added.
District Judge Richard Stearns found in favor of the plaintiffs, though, imposing a temporary restraining order on HUD that will be in place until at least May 16. During that span, HUD must "immediately restore plaintiffs to the pre-existing status quo" by reinstating the fair housing grants. However, Stearns based that order on an earlier ruling by the First Circuit Court of Appeals blocking cuts to the Department of Education — and the Supreme Court overruled that decision last week. HUD lawyers subsequently called in an April 7 filing for Stearns to drop his order and impose a stay keeping the cuts in place during the two lawsuits' proceedings.
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The legal wrangling around DOGE's cuts across the government could go on for months, if not years.
In the meantime, any programs aimed at "correcting for race and having race-conscious provisions" as a means of narrowing the racial wealth gap face a threat that begs the question of "who can then take up the mantle" and what will be the effect to homeownership, according to Michael Neal, a senior fellow in the Housing Finance Policy Center at the Urban Institute. The Institute is a nonprofit organization that describes itself as providing "data and evidence to help advance upward mobility and equity." The potential cuts to HUD's fair housing grants may ultimately affect the degree that prospective home buyers can seek and qualify for mortgages based on their job and income stability, Neal said.
"Unless you're buying all-cash, you have to make some sort of decision, you have to come to some conclusion about what your life is going to look like over the next five to seven years," he said. "This type of action totally contributes to a broader uncertainty and instability, specifically in a sector that relies on those two characteristics in order for people to be successful in homeownership."
In Cincinnati, Tudor's parents were successful in renovating the home into four separate apartment units that hosted family members and tenants and served as the location of an infant daycare business. He and his two older brothers attended college thanks to home equity lines of credit from the house. Through a will and trust and other estate planning, the family plans to maintain its ownership of the home into the future.
The centrality of the home — and the HOME organization's role in Tudor's parents buying it four decades ago — prompted Tudor to raise the alarm on social media about the possible cuts, he said.
"This is our time to lean in," Tudor said. "It's very easy to take organizations like this for granted, and now is the time for us to really show support for organizations that over the last 50 years have been showing support to us and lifting up our most vulnerable citizens."
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At about $425,000, the grant that could be terminated had supplied funding for discrimination investigations in rental properties and mortgage lending and individual counseling sessions for roughly 350 local tenants who reported complaints to HOME, Executive Director Elisabeth Risch told a Cincinnati NPR affiliate last month.
"We just did this big report to show that Black borrowers are denied two times as often as white borrowers, even more for higher-income borrowers," Risch said. "What our termination says is that we can't follow up on that. That's what's been pulled out from under us."
And that's why HOME supporters like Tudor tie the DOGE cuts of fair housing grants directly to the racial wealth gap and the housing segregation, redlining and discrimination that have played such a large role in generating that racial disparity.
"The first step is acknowledging that the wealth disparity was created intentionally — that's hard for some folks," he said. "We are not in a place of equality today, let alone equity, for the past transgressions and the past harms done by local, state and federal policy."