HUD Launches Sweeping Civil Rights Probe Into Minneapolis as Allegations of Race-Based Housing, Massive Fraud Rock Minnesota

Federal housing officials have opened a formal investigation into Minneapolis, accusing the city of unlawfully favoring certain racial and national origin groups in its housing policies, Fox News Digital reported early Friday.

HUD Secretary Scott Turner said the probe reflects deeper, long-standing issues in the state.
“Minnesota has been ground zero for fraud and corruption because it plays a cynical game of racial and ethnic politics,” Turner told Fox. “This goes against our values as Americans, united by a common heritage, language and commitment to equal treatment under law.”

On Thursday evening, Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor sent a letter to Minneapolis Mayor Jacob Frey notifying him that HUD is investigating whether the city violated the Fair Housing Act and Title VI of the Civil Rights Act through its housing strategies, programs and internal equity directives.

The Fair Housing Act bars discrimination in housing based on race, color, religion, national origin, disability, or family status. Title VI separately prohibits discrimination based on race or national origin in any program that receives federal funding.

The investigation comes as Minnesota faces mounting scrutiny over what authorities say is widespread fraud tied to COVID-era social services. Nearly 100 individuals – most from Minnesota’s Somali community – have been charged, and federal prosecutors estimate losses across state-administered programs could exceed $9 billion.

HUD officials say the alleged misuse of taxpayer funds has raised broader concerns that racial politics may also be shaping Minneapolis housing policy.

In its letter, HUD argues that the city has “committed to making available and allocating housing resources based on race and nationality,” a stance that could amount to federal civil rights violations.

The department pointed to specific language in the city’s “Minneapolis 2040” comprehensive plan and its Strategic and Racial Equity Action Plan as particularly troubling.

Adopted in 2020 under Mayor Frey, Minneapolis 2040 lays out the city’s long-term economic, infrastructure and environmental goals. One section promotes the creation of “cultural districts,” defined as a “contiguous area with a rich sense of cultural and/or linguistic identity rooted in communities significantly populated by people of color, Indigenous people, and/or immigrants.”

“This plan strives to eliminate disparities among people of color and indigenous peoples compared with white people,” Minneapolis 2040 states.

HUD’s letter also highlights the city’s Strategic and Racial Equity Action guide, which directs departments to align racial equity objectives with budgets and operations.

“Minneapolis’s current Strategic and Racial Equity Action Plan claims to tangibly align ‘racial equity goals with department plans and budgets,'” the letter states. “For example, your Community Planning and Economic Development department will prioritize ‘rental housing for Black, Indigenous, People of Color and Immigrant communities’ by ‘leveraging (its) rental licensing authority.’”

Trainor was blunt in his response to those policies.
“That is not going to fly,” he wrote to Frey.

Turner emphasized that the investigation aligns with the administration’s broader housing agenda.
“I will continue to deliver on President Trump’s promise to support affordable housing for American families, in part by dismantling illegal racial and ethnic preferences that deny Americans their right to equal protection under the law,” Turner said.

“I am committed to delivering on this promise by thoroughly investigating any housing discrimination involving the City of Minneapolis,” he added.

Fox News Digital reached out to Mayor Frey’s office and the city’s communications team for comment but did not receive a response by publication time.

The fallout from Minnesota’s alleged fraud crisis has already reshaped state politics. In January, Democratic Gov. Tim Walz ended his re-election campaign, acknowledging that the misconduct occurred during his tenure while arguing Republicans had “sensationalized” the multibillion-dollar estimates.

Walz, who has served as governor since 2019, accepted responsibility for oversight lapses but disputed the scale of the alleged losses.

Mayor Frey also addressed the issue earlier this month, saying “obviously, everybody could have done more to prevent” fraud, while stressing that “you do not hold an entire community, any community, accountable for the actions of individuals,” referring to the Somali community.

At the same time, Minneapolis has been shaken by protests and clashes between agitators and federal law enforcement deployed amid the investigations. Tensions escalated further after an ICE agent fatally shot a woman in early January after she allegedly attempted to use her vehicle as a weapon against a federal officer.

Turner said HUD investigators have been on the ground in Minnesota since the start of the year, examining how federal housing dollars are being used.

“We have investigators that are making sure that any HUD-funded programs in Minnesota are being carried out appropriately,” Turner said. “Also, we just launched an investigation and housing authorities, public housing authorities there in Minnesota. They receive about $108 million in Minneapolis and also about $46 million in public housing assistance there. So, we want to make sure that we’re being good stewards of taxpayer money.”

In a post on X earlier this week, Turner said HUD uncovered “up to $84 million in ineligible assistance during Biden’s final year, including $496,000 in improper assistance to 509 dead tenants.”

As federal scrutiny intensifies, Minneapolis now faces simultaneous investigations into housing discrimination, public spending, and one of the largest alleged fraud scandals in state history.