HUD investigates Minneapolis for alleged racial housing preferences

SPECIAL: The Department of Housing and Urban Development (HUD) launched an investigation into the city of Minneapolis on Thursday, alleging that the city’s housing policies illegally prioritized resources based on race and national origin, Fox News Digital has learned.

“Minnesota has become ground zero for fraud and corruption because it plays a cynical game of racial and ethnic politics,” HUD Secretary Scott Turner told Fox News Digital. “This is contrary to our values ​​as Americans united by a common heritage, language, and commitment to equal treatment under the law.”

Deputy Secretary of Fair Housing and Equal Opportunity Craig Trainor sent a letter to Minneapolis Mayor Jacob Frey on Thursday evening informing him that HUD has launched an investigation into whether Minneapolis violated the Fair Housing Act and Title VI of the Civil Rights Act through its housing plans, programs and internal equity directives.

The Fair Housing Act is a federal civil rights law that prohibits housing discrimination based on race, color, religion, sex, national origin, disability, or familial status. Title VI of the Civil Rights Act. Its title prohibits discrimination based on race or national origin in any program or activity that receives federal funding.

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Minnesota has become a hotspot for government fraud as details emerge about a sweeping COVID-era scheme that involved money laundering and was allegedly tied to multiple social service programs. Criminal charges have been filed against nearly 100 people, mostly from Minnesota’s Somali community, while federal prosecutors estimate that the total amount of fraud in various government-run social service programs could exceed $9 billion.

Considering that the alleged fraud involved taxpayer dollars, HUD officials said the evidence shows racial policies extend to Minneapolis’ housing policy.

The letter argues that Minneapolis has “committed to making available and allocating housing resources based on race and national origin,” increasing potential federal civil rights violations.

HUD specifically cited language in the city’s “Minneapolis 2040” comprehensive plan as well as the city’s Strategic and Racial Equity Action Plan as sources of concern.

Minneapolis 2040, The plan, enacted under the Frey administration in 2020, is a comprehensive plan that outlines the city’s economic, infrastructure and environmental vision for the next fifteen years. This chapter includes a section focused on creating “cultural regions,” defined as “a contiguous area with a rich cultural and/or linguistic identity originating from communities of significantly different races, indigenous peoples, and/or immigrants.”

“This plan aims to eliminate inequalities between people of different ethnicities and indigenous peoples compared to white people,” Minneapolis 2040 said. The statement is included.

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The letter also cited Minneapolis’ Strategic and Racial Equity Action guidance, which instructs city departments to align racial equity goals with their plans, programs and budgets.

“Minneapolis’s current Strategic and Racial Equity Action Plan claims to concretely 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,’ using its ‘rental licensing authority’.”

“This will not fly,” Trainor wrote in her letter to Frey.

Minnesota has been rocked by an alleged fraud scandal dating back to the COVID-19 pandemic that prosecutors estimate could total billions of dollars. (Victor J. Blue/Bloomberg via Getty Images)

Turner told Fox News Digital that he would “continue to fulfill President Trump’s promise to support affordable housing for American families, in part by eliminating illegal racial and ethnic preferences that deny Americans their right to equal protection under the law.”

“I am committed to fulfilling this promise by thoroughly investigating all forms of housing discrimination involving the City of Minneapolis,” he said.

Fox News Digital reached out to Frey’s office and the city of Minneapolis communications team for comment on the letter Thursday evening but did not immediately receive a response.

The fallout from Minnesota’s alleged fraud scandal spilled over into the governor’s race in January, when Democratic Gov. Tim Walz ended his re-election bid.

Walz, who has been governor since 2019, said the mistake occurred under his watch. He took responsibility for oversight failures while arguing that Republicans were “sensationalizing” the multibillion-dollar figures.

Immigration and Customs Enforcement officers question a man about his condition on Lake Street near Karmel Mall in Minnesota on December 10, 2025. (Christopher Juhn/Anadolu via Getty Images)

Regarding the scam, Frey said in early January that “of course everyone can do more to prevent it,” but “you can’t hold an entire community, any community, responsible for the actions of individuals,” referring to the Somali community.

Minneapolis has been roiled by protests and agitators clashing with federal law enforcement deployed in the state during fraud investigations. The chaos escalated further in early January when a woman was shot and killed by an ICE agent after she allegedly tried to use her vehicle as a weapon against a federal officer.

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Turner appeared on Fox News at the beginning of the new year and said HUD officials were on the ground in Minnesota investigating funding for public housing authorities.

A firework explodes near the fence outside the Bishop Henry Whipple Federal Building during protests in Minneapolis on January 12, 2026. (Jen Golbeck/Associated Press)

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

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Turner,