WASHINGTON, D.C. — The U.S. Department of Housing and Urban Development announced two high-profile actions Friday, approving federal backing for a major new hospital project in South Carolina while opening a civil rights investigation into the City of Minneapolis over housing policies that federal officials say may violate long-standing fair housing laws.
The department’s Federal Housing Administration said it has closed on a $251.2 million supplemental mortgage to support construction of a new acute care hospital, medical office building and central energy plant in Indian Land, South Carolina. The project, to be operated by MUSC Health and known as MUSC Health Indian Land Hospital, is intended to expand access to hospital services for residents of northern Lancaster County, an area where patients often cross state lines to receive acute care.
HUD officials said the mortgage was originated by Armadale Capital and insured under the FHA’s Section 242/241(a) Mortgage Insurance for Hospital Facilities program. The loan carries a 5.4 percent interest rate and a 25-year term, with the facility expected to open in early 2028.
Federal Housing Commissioner Frank Cassidy described the transaction as a demonstration of how FHA-backed financing can channel capital into underserved communities, saying the project will allow residents to receive quality care closer to home.
At the same time, HUD’s Office for Fair Housing and Equal Opportunity notified Minneapolis that it has launched an investigation into what the department called the city’s “comprehensive racialized housing plans.” HUD said the probe will examine whether the city’s policies violate the Fair Housing Act and Title VI of the Civil Rights Act of 1964, which prohibit discrimination in federally funded programs.
HUD Secretary Scott Turner said the investigation centers on concerns that Minneapolis may be prioritizing housing assistance based on race or national origin rather than need, which he said would undermine equal protection under the law. Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor echoed that position, asserting that the city’s approach could amount to unlawful discrimination.
According to HUD, the investigation will review provisions in Minneapolis’ long-range planning documents and equity strategies, including elements of the “Minneapolis 2040” plan that prioritize housing resources for designated “cultural districts,” as well as policies that emphasize support for people of color, Indigenous people and immigrant communities in housing and rental programs.
The department said it will conduct a thorough review of the city’s policies and practices as part of the investigation, adding that compliance with federal civil rights laws is a condition of receiving HUD funding.
Together, the announcements highlight HUD’s dual role in financing large-scale community infrastructure projects while enforcing federal housing and civil rights laws, as the agency advances both development and compliance priorities under the Trump administration.
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