Lawsuit: Racial Discrimination Against Oklahoma Homeowners

Congress established the Homeowner Assistance Fund (“HAF”) in 2021 to help homeowners in the wake of the COVID-19 pandemic. Oklahoma applied for and received $87,056,967 in federal HAF funds. Oklahoma homeowners were eligible for up to $35,000 of mortgage relief.

The law creating the federal HAF program required a certain amount of aid to be prioritized to “socially disadvantaged individuals,” but Congress did not define that term. States like Texas and even California defined the term based on race neutral criteria. But Oklahoma chose to define that term based on race. Specifically, Oklahoma defined “socially disadvantaged individuals” to include being a “Member of a group that has been subjected to racial or ethnic prejudice or cultural bias within American Society: African American, Hispanic/Latino, Native American, LGBTQ+.”

Using that race-based definition, Oklahoma prioritized federal housing aid to certain minority homeowners over white, Jewish, and Asian homeowners at every phase of its program, including targeted outreach and marketing to preferred minority homeowners, assisting preferred minority homeowners with the application process, and distributing funds to preferred minority homeowners.

In one striking example of Oklahoma’s discrimination, it permitted any eligible homeowner with income below 100% Area Median Income (AMI) to apply, but it only permitted socially disadvantaged individuals to apply between the income levels of 100% and 150% AMI. In other words, a black homeowner with an income between 100% and 150% AMI could automatically apply for aid, but a white homeowner in the same income range could not (without showing some other factor of disadvantage).

Oklahoma’s discriminatory efforts were successful: Of the approved applications, 26% of homeowners were black, 13% were Native American, 1% were Asian, and 60% were white. But those statistics contrast starkly with Oklahoma’s demographics, where about 7.9% of citizens are black, 9.5% of citizens are Native American, 2.6% of citizens are Asian, and 73% of citizens are white.

In November 2024, a group of Oklahoma homeowners, on behalf of themselves and a putative class of similarly situated homeowners in the State, filed a lawsuit in federal court, arguing that Oklahoma’s discriminatory program violated Title VI of the Civil Rights Act and the Equal Protection Clause of the Fourteenth Amendment.

Rather than remedy the harm caused by Oklahoma’s discriminatory actions, Oklahoma officials doubled down, defending Oklahoma’s program and filing a motion to dismiss the case against it. But on December 4, 2025, the federal district court denied Oklahoma’s motion in full, rejecting each of its arguments. The Court explained that “Plaintiffs allege that [Oklahoma] publicly declared that homeowners of a certain race would be subject to laxer requirements for mortgage assistance than homeowners of other races and that their inability to receive assistance was in part due to their disfavored race.” The Court held that “[t]hose allegations sufficiently state a claim upon which this Court can grant relief,” and it noted that “[t]o the extent that Defendants argue they were just following federal law, the Equal Protection Clause does not provide states any ‘they told me to’ safe harbor.”

Oklahoma continues to defend its program in court. At the same time, Republican State leaders have refused to step up to take over the case or force the rouge agency that administered the program, OHFA, to remedy the harms it caused to Oklahoma homeowners. Instead, they allowed OHFA to administer its unlawful program under their watch and continue to sit idly by while the agency continues to defend its racially discriminatory actions in court.