Illinois Attorney General Leads Multistate Lawsuit Over Federal Fair Housing Funding

CHICAGO — Illinois Attorney General Kwame Raoul is co leading a coalition of 16 attorneys general in a lawsuit challenging actions by the U.S. Department of Housing and Urban Development that they say threaten state fair housing enforcement. The lawsuit alleges the agency is attempting to withhold funding from state and local fair housing agencies that enforce protections under their own state laws. The dispute centers on guidance issued in September 2025 that warned agencies they could lose funding unless they stop enforcing certain housing discrimination protections. Officials said those protections in Illinois include safeguards related to sexual orientation, gender identity, language, criminal records and source of income. The lawsuit claims the federal government is trying to weaken the partnership between HUD and state agencies created under the Fair Housing Act through the Fair Housing Assistance Program, which helps investigate discrimination complaints and support enforcement efforts. The coalition argues the policy could increase the cost of enforcing fair housing laws and create confusion over enforcement rules. The case also alleges the federal guidance violates the U.S. Constitution and the federal Administrative Procedure Act.