Attorney General Aaron M. Frey has joined a coalition of 20 other plaintiffs in filing a lawsuit against the U.S. Department of Housing and Urban Development (HUD), alleging that recent changes to HUD’s Continuum of Care grant program will harm individuals experiencing homelessness or housing insecurity.
The lawsuit claims that HUD is implementing significant alterations to its grant program, including reducing funding for permanent housing and project renewals, and introducing new conditions on funding access. These include requirements for providers to recognize only two genders, mandating acceptance of services as a precondition for housing, and penalizing providers in areas without strict anti-homelessness laws. The complaint argues these measures conflict with both congressional intent and previous HUD guidance.
Attorney General Frey stated, “Winter is coming here in Maine and now the Administration is redirecting congressionally appropriated funds that keep over 1,200 Mainers housed. While there is little doubt the courts will agree that the Administration has once again overstepped, the chaos and uncertainty these decisions create are harmful and unnecessary.”
For years, HUD’s Continuum of Care grants have supported local coalitions in planning housing solutions for those experiencing homelessness. Providers rely on this predictable funding to sustain their programs.
HUD has traditionally promoted a “Housing First” model—offering stable housing without requiring sobriety or minimum income as prerequisites—which research shows can improve stability and public health while reducing community costs associated with homelessness.
Governor Janet Mills commented on the situation: “I applaud Attorney General Frey for joining this lawsuit to stop the Trump Administration from their cruel and unlawful attempt to cut funding for those experiencing homelessness. As I have previously warned, this callous change by the Trump Administration – as we begin the holiday season– would jeopardize stable housing for 1,200 Maine people and drive up costs for Maine municipalities. The Trump Administration should withdraw this unnecessary directive.”
Continuum of Care programs currently support more than 1,800 people across Maine—including families with children, seniors, veterans, individuals with disabilities, and survivors of domestic violence. Under HUD’s proposed changes starting in 2026, more than 1,200 Mainers could lose their housing.
Historically about 90% of Continuum of Care funding has gone toward permanent housing; under the new rule—which was not authorized by Congress—that figure would be reduced by two-thirds beginning with grants awarded in 2026. Additionally, grantees were previously able to guarantee renewal funding at around 90%, but under new guidelines this will drop to just 30%. This reduction could lead to widespread evictions among formerly homeless people who currently benefit from these programs.
The lawsuit further alleges that HUD failed to follow proper rulemaking procedures or obtain congressional authorization before enacting these changes—contradicting both statutes passed by Congress and existing agency regulations—and did not provide adequate explanation for departing from established policy practices.
The legal action was filed in federal District Court in Rhode Island by attorneys general from Washington (Nick Brown), New York (Letitia James), Rhode Island (Peter Neronha), along with representatives from Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Illinois, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, Oregon, Vermont Wisconsin; governors from Kentucky and Pennsylvania also joined the coalition.
