Although Lorain is not officially a sanctuary city, because City Council never voted on it, their police officers have been instructed not to ask about immigration status during routine traffic stops.
But that could put the city in violation of federal guidelines, which could lead to federal money being cut to Lorain.
Lorain was granted a $1.1 million grant from the Department of Justice to hire and retain five police officers.
Those jobs could now be on the line with federal cuts.
Last year Lorain's fire department received a federal grant to avoid firefighters being let go.
President Trump said while campaigning last September that cities that don't cooperate with federal guidelines will not receive taxpayer money.
Lorain's police chief said his officers don't ask about immigration status to avoid racial profiling.
Lorain's Safety Service director Dan Given said the city is cooperating with federal guidelines.
"I'm not concerned whatsoever, with regards to that, because I feel we are following through with all the obligations that we have, with what the federal government has currently given cities such as ours," Given said.