A federal judge has issued a preliminary injunction blocking the U.S. Department of Housing and Urban Development (HUD) from implementing changes to its Continuum of Care grant program. The program is the largest source of federal funding for homelessness assistance in the United States.
The ruling, delivered orally by U.S. District Court Judge Mary McElroy, requires HUD to process grant applications under the previous terms that existed before the agency made recent program changes. These changes had been challenged in court by a coalition of states who argued that they were illegal and would leave tens of thousands without housing.
The coalition, led by attorneys general from Washington, New York, and Rhode Island, filed suit against HUD in November. They claimed HUD unlawfully rescinded a key program notice and replaced it with one that limited access to long-term housing and other services. According to the lawsuit, these actions violated congressional intent by reducing funding for permanent housing and imposing new conditions on grant recipients.
Among the contested conditions were penalties for housing providers recognizing gender identity and diversity, requirements for residents to agree to additional terms to receive housing, and measures punishing providers in areas without strict anti-homeless laws. The plaintiffs argued these conditions contradicted previous HUD guidance and lacked congressional authorization. Additionally, they noted that HUD issued its program notice after Congress’s mandated deadline for such changes.
Attorney General Aaron Frey commented on the court’s decision: “With the court ordering the federal government to simply follow the law and release critical housing program grant funds as Congress directed, stability and the rule of law are being advanced over the chaos and ideological whims of this Administration,” said Attorney General Aaron Frey. “By virtue of this preliminary order sought by Maine and a coalition of other states, 1,200 Mainers are protected from homelessness that would undoubtably result from being unlawfully deprived of important housing support promised by Congress.”
In Maine alone, more than 1,800 people—including families with children, seniors, veterans, individuals with disabilities, and survivors of domestic violence—receive support through Continuum of Care programs.
Governor Janet Mills also responded: “I applaud Attorney General Frey for securing this injunction to stop the Trump Administration’s cruel policy change, which jeopardized housing for 1,200 people in Maine,” said Governor Janet Mills. “This needless and misguided directive would have hurt Maine people and forced Maine cities and towns to grapple with an increased demand for more emergency shelters and services. The Trump Administration should focus on helping people with rising cost of living, not taking away housing from vulnerable people.”
The legal complaint argued that HUD’s actions were arbitrary because they did not explain abandoning established policies or consider the consequences of terminating funding for formerly homeless individuals. It also alleged violations of statutory timelines set by Congress and failure to engage in required rulemaking procedures before changing program conditions.
The lawsuit is led by attorneys general Nick Brown (Washington), Letitia James (New York), Peter Neronha (Rhode Island), along with Aaron Frey (Maine) and their counterparts from Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Illinois, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Wisconsin; as well as governors from Kentucky and Pennsylvania.
