The developers of Colony Ridge — a residential community north of Houston that’s targeted Hispanic homeowners — agreed to pay $68 million and temporarily pause construction as part of a lawsuit settlement reached with the federal government, according to court documents.
The agreement with the Department of Justice and U.S. Consumer Financial Protection Bureau, filed in court Tuesday, settles the 2023 lawsuit alleging that owners of the development engaged in deceptive advertising and targeted Hispanic residents with predatory loans and seller-financed mortgages.
The settlement comes years after top Republican state leaders said the owners’ alleged deceptive practices and targeted advertisements created a safe haven for people without legal immigration status and tricked Hispanic consumers with the “American dream” of homeownership.
An investigation conducted by the Department of Justice’s Civil Rights Division found that Colony Ridge created a bait-and-switch predatory scheme and misrepresented the threat of flooding in the area to buyers. Colony Ridge used seller-financed loans without verifying a borrower’s ability to pay, resulting in a high rate of foreclosures in the development, according to a Tuesday news release from the DOJ.
“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,” Hareem Dhillon, an assistant attorney general of the DOJ’s civil rights division, said in a statement. “This DOJ will go after all lenders, financiers and land developers who participate in schemes which ultimately encourage illegal immigration.”
Colony Ridge was scrutinized by right-wing media and state officials in 2023, claiming the area had suffered rampant crime at the hands of cartels and immigrants. Development owners that year refuted the claims and fought back against a letter penned by state Republicans urging Texas Gov. Greg Abbott to consider placing Liberty County under a state conservatorship to “clean up and clean out Colony Ridge.”
Attorneys representing Colony Ridge could not immediately be reached for comment Tuesday.
The settlement restricts Colony Ridge from developing new residential plats for three years and directs the developers to invest $48 million in infrastructure improvements and $20 million in increased law enforcement presence in Colony Ridge. It also directs owners of the development to protect loan borrowers by developing a plan that will address harms to their credit.
In a Tuesday statement about the settlement, Texas Attorney General Ken Paxton said some of the funding for law enforcement can also be used to facilitate 287(g) agreements, which authorize officers to assist with federal immigration enforcement efforts.
"Under my watch, Texas will never be a sanctuary for illegals,” Paxton said. “Colony Ridge endangered American citizens by allowing illegal aliens to run rampant on its streets, in its schools, and in its community.”
Copyright 2026 Houston Public Media News 88.7