The developers of Colony Ridge, a sprawling master-planned community north of Houston, will pay $68 million and temporarily stop expanding under a settlement with the federal government.
The agreement, filed Tuesday in federal court, resolves a 2023 lawsuit by the U.S. Department of Justice and the Consumer Financial Protection Bureau alleging the project’s owners targeted Hispanic buyers with deceptive advertising and predatory, seller-financed mortgages, Houston Public Media reported.
Federal investigators alleged Colony Ridge lured buyers with the promise of affordable homeownership, then steered them into high-risk loans without verifying their ability to repay. The DOJ’s Civil Rights Division also alleged the developers misrepresented flood risks and operated a bait-and-switch scheme that led to elevated foreclosure rates across the development.
Under the settlement, Colony Ridge is barred from developing new residential plats for three years. The developers must also invest $48 million in infrastructure improvements and pay $20 million to boost law enforcement presence in the community. The agreement requires the company to implement borrower protections and create a plan to address credit harm tied to its lending practices.
“Intentionally targeting vulnerable borrowers with the American dream of homeownership and then trapping them in a predatory scheme is not only wrong, it also violates our civil rights laws,” U.S. Assistant Attorney General Harmeet Dhillon said in a statement.
The case became a political flashpoint in Texas well before the settlement. In 2023, Republican state leaders and conservative media outlets accused Colony Ridge of creating a haven for undocumented immigrants and fueling crime — claims the developers denied at the time. Texas Attorney General Ken Paxton, responding to the settlement Tuesday, said some of the law enforcement funding could support 287(g) agreements that allow local officers to assist with federal immigration enforcement.
The settlement throws a temporary wrench into the Houston-area housing market, as well as one of the region’s most prolific land development engines. Colony Ridge has added thousands of lots in Liberty County in recent years, marketing directly to working-class Hispanic buyers often shut out of traditional mortgage channels.— Eric Weilbacher
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