BOSTON — The U.S. Department of Housing and Urban Development has launched a federal civil rights investigation into the City of Boston, accusing Mayor Michelle Wu’s administration of illegally prioritizing race in its housing and homeownership programs.

In a six-page letter sent to City Hall, HUD alleges that Boston embedded racial considerations “in every layer of operations in city government,” steering housing assistance toward Black and Latino residents in ways that may violate the Fair Housing Act.

Federal officials argue the city’s policies went beyond outreach or gap-closing efforts and instead crossed into race-based decision-making — favoring certain applicants while disadvantaging others based on skin color rather than income, need, or eligibility.

The letter also criticizes Boston for encouraging banks and mortgage lenders to deepen partnerships with minority communities as part of what HUD describes as a “social engineering project” driven by a “warped mentality.” According to the agency, those actions may constitute unlawful pressure on financial institutions to consider race in lending and housing assistance.

HUD cites Boston’s own public statements as evidence. On the city’s official website, Mayor Wu’s housing strategy explicitly states its goal of “reducing racial disparities through homeownership,” language federal officials say raises red flags under civil rights law.

The city has also promoted the construction of more than 17,000 new affordable housing units since Wu took office — figures now being reviewed as part of the investigation to determine whether federal housing rules were followed in the design and administration of those programs.

HUD has given the Wu administration 10 business days to respond to the allegations and provide documentation defending its policies.

The probe marks a major escalation in scrutiny of Wu’s equity-driven housing agenda and sets up a high-stakes confrontation between Boston City Hall and federal regulators over whether progressive race-based policies crossed the legal line into discrimination.