Judge blocks HUD changes that would have left thousands without housing
December 19, 2025 (SAINT PAUL) — A federal judge today ordered the U.S. Department of Housing and Urban Development (HUD) to preliminarily halt changes to its Continuum of Care grant program — the largest resource for federal homelessness assistance funding — after a coalition of states argued in court that the changes were illegal and would leave tens of thousands of people around the country without a place to live.
In her order orally granting a preliminary injunction, U.S. District Court Judge Mary McElroy barred HUD from implementing its proposed changes to the Continuum of Care program and directed HUD to process applications under the terms that existed prior to its unlawful program changes.
A coalition of states sued HUD in November for illegally upending support for people experiencing housing insecurity or homelessness by abruptly rescinding a necessary program notice, replacing it with another that limited access to long-term housing and other services. The lawsuit says HUD drastically changed its Continuum of Care grant program in violation of congressional intent by sharply reducing funding for permanent housing and putting unlawful conditions on access to the funding.
The illegal conditions include penalizing housing providers that recognize gender identity and diversity and mandating residents agree to additional conditions to obtain housing. HUD also added illegal conditions to punish providers in localities that do not enforce strict anti-homeless laws and disadvantage programs that address mental disabilities and substance use disorder. Those conditions go against HUD’s previous guidance and were not authorized by Congress. The program notice was also issued well after HUD’s congressionally-mandated deadline for making program changes, virtually guaranteeing gaps in funding.
"If the Trump Administration got its way, tens of thousands of formerly homeless people would have lost their housing for no reason other than Donald Trump’s politics of cruelty,” said Attorney General Ellison. “Fortunately, we were able to temporarily halt the Trump Administration’s unlawful actions and protect unhoused people from losing their housing and having their lives destroyed. It’s troubling and disappointing that we even had to go to court over this matter, but I will always defend the people of Minnesota from the Trump Administration’s lawlessness and overreach.”
In their complaint, 20 attorneys general and two governors argued that HUD’s actions were arbitrary and capricious, as HUD made no effort to explain the abandonment of its own longstanding policies, failed to reckon with the obvious consequences of abruptly terminating funding for housing occupied by formerly homeless families and individuals, and violated the law by not following the timeline Congress set for this program and not receiving congressional authorization for these new conditions. The plaintiffs also argued HUD violated its own regulations by not engaging in rulemaking before issuing the changes.
Washington Attorney General Nick Brown, New York Attorney General Letitia James, and Rhode Island Attorney General Peter Neronha are leading the lawsuit, which is joined by Attorney General Ellison and the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Vermont, Wisconsin, and the governors of Kentucky and Pennsylvania.
