HUD Initiates Investigations Into Race-Based Housing Programs in Minneapolis

HUD Secretary Scott Turner called Minnesota ground zero for fraud and corruption.

The U.S. Department of Housing and Urban Development in Washington on July 13, 2024. Madalina Vasiliu/The Epoch Times

The Department of Housing and Urban Development (HUD) is investigating the city of Minneapolis’s “comprehensive racialized housing plans,” the department said in a statement on Jan. 16.

HUD’s Office for Fair Housing and Equal Opportunity (FHEO) notified the city of the investigation and stated its belief that the city’s race-based housing programs violate the Fair Housing Act and Title VI of the Civil Rights Act of 1964.

In a Jan. 15 letter to Minneapolis Mayor Jacob Frey, FHEO Assistant Secretary Craig W. Trainor said the Fair Housing Act makes it illegal to discriminate against any person on the basis of race or national origin in the sale or rental of a dwelling. Title VI bans racial or national origin discrimination in any program that receives federal funding.

The letter alleged an increase in racial and ethnic favoritism within the Minnesota government, calling it “alarming.”

Trainor cited fraud committed by Somali citizens in the state that he said cost U.S. taxpayers at least $9 billion. Trainor accused Gov. Tim Walz’s administration of allowing the fraud to flourish and of trying to politically align with the Somali community, primarily for election favoritism.

“This racial favoritism appears to extend to Minneapolis’s housing policy,“ the letter reads. ”Specifically, Minneapolis has committed to making available and allocating housing resources based on race and nationality.”

The letter cited the “Minneapolis 2040” plan issued by the city, which aims to prioritize housing resources to “cultural districts,” which are defined in the plan as areas rooted in “communities significantly populated by people of color, Indigenous people, and/or immigrants.”

The plan promises to expand programs that support existing homeowners in affording and maintaining their homes, with a “focus on people of color, indigenous people.” It vowed to use “racial equity goals” as one criterion when examining various state programs and services.

The city’s Community Planning and Economic Development department also intends to prioritize rental housing to black people, indigenous people, people of color, and immigrant groups by leveraging its rental licensing authority, the letter reads.

“As a result of Minneapolis’s racialized housing policy, I have directed the Office of Special Investigations to investigate Minneapolis,” Trainor wrote.

“If FHEO finds reasonable cause to believe Minneapolis has or intends to violate the civil rights of its citizens, we will file charges of discrimination or refer the matter to the United States Department of Justice for further enforcement.”

President-elect Donald Trump's nominee for Secretary of the U.S. Department of Housing and Urban Development, Eric Scott Turner, testifies before the Senate Committee on Banking, Housing, and Urban Affairs on Capitol Hill in Washington on Jan. 16, 2025. Madalina Vasiliu/The Epoch Times

HUD Secretary Scott Turner called Minnesota ground zero for fraud and corruption, accusing the state of choosing to ignore the law and instead serving a “cynical political agenda.”

These alleged actions undermine American values and the commitment to equal treatment under the law for all citizens, he said.

“In Minnesota, @HUDgov has uncovered up to $84 million in ineligible assistance during Biden’s final year—including $496,000 in improper assistance to 509 dead tenants,” Turner said in a Jan. 13 post on X.

The Epoch Times reached out to Walz and Frey for comment and did not receive a response.

Minnesota Operations, Fraud

Both Walz and Frey have been highly critical of the Trump administration’s immigration enforcement actions in the state.

In a Jan. 15 statement, Walz accused Immigration and Customs Enforcement agents of “pulling over people indiscriminately, including U.S. citizens, and demanding to see their papers.”

On Jan. 17, Walz’s office dismissed reports that the governor was being investigated by the Department of Justice.

“Weaponizing the justice system and threatening political opponents is a dangerous, authoritarian tactic,” he said.

Meanwhile, in a Jan. 7 statement, Frey asked Immigration and Customs Enforcement to leave Minneapolis and the state “immediately.”

“We stand by our immigrant and refugee communities—know that you have our full support,” he said.

Multiple federal agencies are probing Minnesota for the fraudulent use of federal funds.

Last month, a federal prosecutor suggested that more than 50 percent of the approximately $18 billion in federal funds assigned to the state since 2018 may have been stolen.

The funds were channeled into 14 state programs, including housing, autism, and child nutrition services run by Somalis.

Since 2022, almost 100 people have been charged in various Minnesota fraud schemes, and most of them are of Somali descent.