Judge rules that HUD effort to change criteria for homeless funding is
unlawful
[April 01, 2026]
By MICHAEL CASEY
A federal judge in Rhode Island ruled on Tuesday that the Trump
administration's effort to dramatically change the criteria to get tens
of millions of dollars in funding to aid homeless people was unlawful.
Several nonprofits filed a lawsuit last year accusing the U.S.
Department of Housing and Urban Development of changing the rules for
receiving $75 million to build housing for homeless families and
individuals. The plaintiffs accused the Trump administration of issuing
a new Notice of Funding Opportunity, or NOFO, for the Continuum of Care
Builds program to better align with its social policies.
U.S District Judge Mary McElroy, nominated by President Donald Trump,
said the department’s “slapdash imposition of political whims” was
unlawful and she ordered it to scrap the new policy.
“Once again, this Court is faced with a case in which an executive
agency has made a last-minute decision to make major, disruptive changes
to grants within its purview, all for the express purpose of
accomplishing the current administration’s policy objectives,” McElroy
said in her ruling that the NOFO violated the Administrative Procedure
Act, a law governing how federal agencies develop and issue regulations.
A spokesperson for HUD did not immediately respond to a request for
comment.
Advocates for plaintiffs welcomed the ruling.
“For more than three decades, the federal government has supported
housing providers and communities through HUD’s programs to help people
experiencing homelessness move into stable housing,” Skye Perryman,
president and CEO of Democracy Forward, co-counsel for the plaintiffs,
said in a statement. “We are pleased that the court has stopped the
Trump-Vance administration from holding life-saving funding hostage to a
political agenda.”
Ann Oliva, CEO of the National Alliance to End Homelessness, said the
ruling was “a victory for people across this nation who have overcome
homelessness and stabilized in HUD’s permanent housing programs.”
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Housing and Urban Development Secretary Scott Turner listens during
a cabinet meeting at the White House, Jan. 29, 2026, in Washington.
(AP Photo/Evan Vucci, File)
 “Today’s news reinforces a
fundamental truth: that the work to end homelessness is not
partisan, and never should be interfered with for political means,"
Oliva said in a statement.
Plaintiffs argued the Trump administration was aiming to upend
polices in place for decades to satisfy its political
considerations, including whether jurisdictions “support sanctuary
protections, harm reduction practices, or inclusive policies for
transgender people.”
The Alliance and the Women’s Development Corporation argued that HUD
lacked the authority to make the changes, adding that the new award
process was “shockingly unlawful” and would “irreparably injure
qualified applicants for these funds and the communities they
serve.”
In its court filings, HUD argued the new criteria was an effort “to
ensure the availability of funding to protect our Nation’s most
vulnerable individuals and families from the trauma of homelessness
while simultaneously promoting self-sufficiency.”
“Defendants acted reasonably and prudently because the NOFO
conditions, focusing on public safety, cooperation with law
enforcement and prohibitions on illegal drug use, are sufficiently
related to the funding goals of self-sufficiency and reduction of
trauma,” HUD wrote.
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