Elon Musk Orders HUD to Cut Fair Housing Act Awards

Fair Housing Act funding for Chicago-area organizations is frozen.

The U.S. Department of Housing and Urban Development abruptly terminated or delayed grants to at least five local groups as well as 78 grantees across the country, leaving some without contracts or reimbursement since the start of the year, the Chicago Tribune reported.

Among those impacted is the Chicago Lawyers’ Committee for Civil Rights, which had 16 months left in a three-year grant totaling $425,000 annually.

The termination was directed by President Donald Trump and billionaire Elon Musk’s Department of Government Efficiency, according to HUD’s termination letter to the group, which said the grant “no longer effectuates the program goals or agency priorities.”

At least one group is challenging the cancellations in court, saying the termination of funds awarded through HUD’s Fair Housing Initiatives Program is illegal.

Four members of the National Fair Housing Alliance are suing HUD and DOGE over the allegedly unlawful cancellation of more than $30 million in grants through the program. The lawsuit, which is seeking class-action status, was filed Thursday in federal court in Massachusetts.

The South Suburban Housing Center and Open Communities in Evanston received the same letter and faces similar funding losses posed to disrupt decades of work supporting low-income and minority communities.

The nonprofit lost its two grants, which totaled about $1.4 million over the next three years, funds it has received since 1995. The amount represented 92 percent of its fair housing budget and 37 percent of its total organizational budget.

Chicago’s Continuum of Care network — responsible for coordinating housing services for the homeless — has over $112 million in HUD grants still pending contracts. At least 14 organizations have been operating without reimbursement since January.

The cuts come amid broader federal workforce reductions at HUD, including layoffs at the agency’s Chicago office.

HUD Secretary Scott Turner, who was confirmed by the U.S. Senate on Feb. 5, has defended the changes, saying the agency is “taking inventory” to improve efficiency. HUD officials have promised some clarity in the coming weeks, with letters to awardees expected soon.

The cuts are targeting racial justice initiatives and could erode protections for vulnerable groups, particularly as housing discrimination complaints rise and affordable housing options shrink, the National Fair Housing Alliance said.

For other organizations, like Ignite, which provides services for homeless youth as the parent organization for Continuum of Care, the clock is ticking.

Ignite has dipped into reserves to continue operations while awaiting its yearly $320,000 contract reimbursement. Others are turning to donors or state-level funding to close the gaps.

— Judah Duke