January 1, Biden Housing Bailout Sparks Racial Discrimination Lawsuits

Wyatt’s Take

• A $10 billion federal housing fund gave almost half its aid to black Americans, despite them being just 12% of the population.
• Several Republican-led states face lawsuits for using race-based criteria in distributing funds, which many say is illegal discrimination.
• Federal officials say the rules allowed broader definitions of who was “socially disadvantaged,” but white applicants rarely benefited.

The Homeowner Assistance Fund, meant to help struggling Americans pay mortgages during COVID, funneled billions using explicit racial preferences. Nearly half the money went to black homeowners, far exceeding their proportion of the population. White residents in states like Georgia and Missouri are suing over what they claim is unconstitutional discrimination.

Georgia’s program sent 82% of its payments to black residents, while whites received just 13%, even though both groups have high poverty rates. The lawsuit says this can’t be chalked up to income alone. It argues the state targeted black residents for outreach and approved their applications at a higher rate.

“This dramatic difference cannot be explained by income disparities or other race-independent reasons,” one lawsuit states.

Federal rules told states to prioritize “socially disadvantaged” people, a definition the Biden administration said included minorities presumed to face bias. States like California and Texas used geographic or economic hardship instead, but Georgia and Missouri chose the racial approach—despite being Republican strongholds.

Missouri partnered with minority groups and flagged applicants as “disadvantaged” based partly on their declared race. Again, black residents, under 12% of Missouri’s population, received 44% of the bailout funds. State officials defend their actions by pointing to Treasury definitions that included cultural bias, but critics say this only opened the door to unfair racial preferences.

Defenders, including Georgia’s attorney general, insist the programs followed federal rules and allowed any applicant to declare themselves disadvantaged by submitting an affidavit. Still, just a fraction of white applicants were approved compared to minorities. Lawsuits argue the intent and outcome were clear: race played too big a role.

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Wyatt Matters

Programs that pick winners and losers based on skin color threaten fairness and unity in our communities. Middle America believes in equal treatment—not handouts determined by race.