Court Vacates Unlawful Funding Criteria for Solutions to Homelessness in Case Brought by Broad Coalition
Jun 30, 2026
Washington, D.C. - A federal court has struck down unlawful funding criteria imposed by the Trump-Vance administration that threatened to shift critical homelessness funding away from proven, evidence-based solutions. The court vacated the U.S. Department of Housing and Urban Development’s (HUD’s) 2025 Notice of Funding Opportunity (NOFO), rejecting the agency’s attempt to impose new conditions that could have pushed an estimated 170,000 Americans into homelessness.
“The federal court’s decision to reject the Trump-Vance administration’s attempt to disrupt essential housing services for people experiencing homelessness, including families, seniors, veterans, and people with disabilities, is both appropriate and just,” said Renee M. Willis, NLIHC President and CEO. “Over several months, HUD supported a NOFO that delayed noncompetitive renewals, issued grant agreements with discriminatory and anti-inclusionary provisions, and upended the stability of programs that are rooted in evidence-based solutions to homelessness. NLIHC celebrates this ruling and remains committed to working with our allies to safeguard the stability of critical programs that help hundreds of thousands avoid displacement and maintain stable housing.”
The coalition behind the lawsuit, NAEH, et al. v. HUD, released the following joint statement in response to the ruling:
“This ruling is a welcome resolution that makes clear that the 2025 NOFO was unlawful and that the conditions the administration is putting on funding will cause harm to real people. We are grateful for this clarity, and remain committed to fighting the administration’s ongoing attempts to weaponize federal funding at the expense of people experiencing homelessness. Families, seniors, veterans, and people with disabilities depend on programs funded by these grants and we are proud to fight to protect proven solutions to homelessness and the hundreds of thousands of people who rely on this vital support.”
This victory closes one important chapter in the saga that has seen nonprofit organizations triumph repeatedly as they have challenged Trump-Vance administration efforts to unlawfully weaponize federal funding.
For years and through multiple presidential administrations, the Department of Housing and Urban Development’s (HUD) Continuum of Care (CoC) Program has helped provide the necessary resources for local governments and organizations to fund permanent housing projects for people experiencing homelessness. It has always been HUD’s obligation to release these resources in a timely manner through a lawful CoC Program competition NOFO. However, HUD attempted to radically upend this critical program with a FY 2025 NOFO that threatened to push an estimated 170,000 Americans into homelessness.
In response to the 2025 NOFO, the National Alliance to End Homelessness (NAEH), the National Low Income Housing Coalition (NLIHC), Crossroads Rhode Island, Youth Pride, Inc., as well as the County of Santa Clara, Calif., San Francisco, Calif., King County, Wash., Boston, Mass., Cambridge, Mass., Nashville, Tenn., and Tucson, Ariz took legal action challenging the grant restrictions. In December 2025, a federal judge granted preliminary relief in the case, and an appeals court refused to disturb the ruling in April. In February, Congress stepped in and required HUD to renew all existing grants for FY 2025. HUD still has not finalized those FY 2025 awards that by now are long overdue, leaving projects without funding and further disrupting the nation’s flagship homelessness response program.
On June 1, 2026, HUD released a FY2026 NOFO that would also unlawfully upend evidence-based, community approaches to homelessness, threatening the housing of more than 97,000 formerly homeless individuals. The plaintiffs sought to add a challenge to that NOFO to this case, but the court has invited plaintiffs to file a new case instead.
Democracy Forward and the ACLU Foundation of Rhode Island represent the coalition of nonprofit organizations in the matter; the National Homelessness Law Center represents NAEH and NLIHC; Public Rights Project represents the cities of Boston, Cambridge, Nashville, and Tucson as well as King County; Santa Clara County and San Francisco represent themselves. The Lawyers’ Committee for Rhode Island represents all plaintiffs.
Additional quotes from members of the coalition and the full statement from Democracy Forward is available here.
Plaintiff and co-counsel quotes regarding the original filing are available here.
Read the court order here.
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