The Trump administration has backed down from restrictions it attempted to place on federal fair housing funding, after a lawsuit by California and 15 other states.
California Attorney General Rob Bonta, who co-led the legal challenge with Illinois Attorney General Kwame Raoul, announced that the U.S. Department of Housing and Urban Development has agreed to dismiss the lawsuit and not enforce the challenged conditions.
The coalition filed the lawsuit in March 2026, challenging restrictions in HUD's Fiscal Year 2025 Fair Housing Assistance Program (FHAP) Funding Guidance. The proposed conditions could have limited state and local agencies' ability to enforce their fair housing laws, including by restricting reimbursement for certain complaints and threatening agencies that enforce protections beyond federal law.
HUD confirmed it will not impose, implement, or enforce the conditions in the future. The FY 2025 Guidance is no longer in effect, and the conditions will not apply to FY 2026 funding or future guidance.
The FHAP provides funding to state and local agencies that enforce fair housing laws. In California, the program supports the California Civil Rights Department's work to protect residents from housing discrimination.
The coalition included the attorneys general of Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, New Jersey, Rhode Island, Vermont, Virginia, and Washington.