Attorney General Ken Paxton announced on Tuesday, Feb. 10, that Texas has reached a $68 million settlement with the developers of Colony Ridge, bringing an end to state and federal lawsuits that accused the development of deceptive sales practices and discriminatory lending.
The agreement, reached alongside President Trump’s Department of Justice, freezes new residential expansion for three years and requires major changes to how Colony Ridge sells property, finances lots, and supports infrastructure and law enforcement in the area.
The settlement resolves federal and state lawsuits alleging violations of consumer protection and fair housing laws. Colony Ridge denies the allegations and, under the terms of the agreement, does not admit to any wrongdoing.
“Under my watch, Texas will never be a sanctuary for illegals. Colony Ridge endangered American citizens by allowing illegal aliens to run rampant on its streets, in its schools, and in its community. Now, it’s time for those responsible to pay a steep cost for their unlawful actions,” Paxton said. “My office will continue to bring the full force of the law against anyone who threatens the safety of our state or creates a safe harbor for illegals.”
Colony Ridge officials say they are ready to move forward.
“We’re happy to resolve these lawsuits and move forward serving our growing community,” said John Harris with Colony Ridge Development. “The settlement allows us to continue investing in our neighborhoods and supporting the thousands of families who have trusted us to provide a place for them to call home. We’re glad that funds from this agreement will be directed back into the community to benefit residents.”
Under the terms of the settlement, Colony Ridge will not be allowed to seek approval for new residential plats for direct-to-consumer sales for the next three years. New subdivisions without deed restrictions are also off the table during that time. Future development must meet stricter standards, including architectural review requirements and compliance with county permitting rules.
The agreement also tightens buyer verification. Purchasers must now provide valid Texas-issued identification or a valid passport and visa issued or renewed after Jan. 1, 2025. The development must also coordinate with law enforcement to ensure buyers are not on terrorism watch lists or tied to transnational criminal organizations. The settlement requires compliance with Texas laws that restrict certain foreign land purchases.
A significant portion of the settlement money is earmarked for improvements inside the development itself.
Of the $68 million total, $48 million must go toward infrastructure. That includes $18 million specifically dedicated to drainage and flood control improvements, including engineering reviews and upgrades aimed at reducing flooding risks. Another $30 million must be spent on roads, water systems, sewage infrastructure, and other projects designed to improve safety and livability. Existing repair needs must be prioritized before any new development moves forward.
An additional $20 million will go toward increasing law enforcement presence in the area. The funds may be used to support immigration enforcement partnerships, build a DPS or constable substation within the development, hire at least two additional full-time officers to patrol the area, and purchase equipment and vehicles.
The settlement also makes major changes to how Colony Ridge handles lending and foreclosures.
The company must adopt formal underwriting standards to better evaluate whether buyers can realistically repay their loans. It must implement a Default Avoidance Plan aimed at reducing foreclosures, including individualized borrower reviews, zero-percent forbearance options, short-term assistance for taxes or POA dues, and refinancing options.
New buyers will also have the option to cancel their purchase by the time their second payment is due and receive a refund of money paid, minus documented costs for any damage to the property. Before initiating foreclosure, the company must now provide at least 45 days’ written notice.
Advertising rules are changing as well. Colony Ridge must ensure its marketing accurately reflects property conditions, utilities, floodplain status, and loan terms. It can no longer advertise properties as “move-in ready” or having “all city services” unless utilities are immediately available.
The agreement remains in place for three years, with some financial and infrastructure obligations continuing until all required funds are spent. If Colony Ridge fails to comply, federal and state authorities may reinstate their lawsuits or pursue further enforcement action.