William and his three sons have spent the last three weeks decorating the front of their home with banners.
But they were stunned when housing chiefs turned up and told them to remove the flags because it was bringing the area down.
And the family were even more bemused because the street is earmarked for demolition and most of the 50 houses are derelict.
Patriot William, 50, said: "I just can't believe this. We just wanted to show that we are behind Sven and his men and we are being told we can't support our country.
"I just love football and I'm not breaking the law so what's the problem?
"My great-grandfather died defending this flag and now I'm defending it as well."
William and his wife Lesley, of Kingsway, Houghton, have decorated their house for each major football fixture for the last 15 years – but never before have they been asked to remove their decorations.
They and their sons Gareth, 23, David, 21, and Jordan, 15, were putting the finishing touches ready for kick-off on June 10 when three officers from Sunderland Housing Group paid a visit on Thursday afternoon.
Former builder, William, said: "Two representatives from Sunderland Housing told me we have to take the flags down because someone has complained that we are downgrading the area.
"The whole street is getting pulled down soon so how can I be downgrading it any more?
"They said it's okay to display them on match days but it has taken me three weeks to put them up."
But William, who is a volunteer worker for asylum seekers, has admitted he may have to concede defeat and take the flags down because he does not want to jeopardise their spotless tenancy record.
Barry Walker, director of Houghton and Hetton Housing Company, said: "We have had a number of complaints and are in discussions with Mr Hodgson and other local people about this matter."