On July 7, 2026, Washington Attorney General Nick Brown, New York Attorney General Letitia James, and Rhode Island Attorney General Peter Neronha led a coalition of 19 attorneys general plus the governors of Kentucky and Pennsylvania in filing suit against the Trump administration once again to protect billions of dollars in grants from the Department of Housing and Urban Development (HUD) that provide housing and other critical services to help fight homelessness.   

For decades, HUD has helped local and regional coalitions plan and coordinate housing and services for people experiencing homelessness through Continuum of Care (CoC) grants, which were created by Congress. Providers pair these grants with other funding sources and rely on the predictability and continuity of the grants to support the unhoused. HUD has a longstanding policy of encouraging what is known as a “Housing First” model that provides stable housing to individuals without requiring preconditions like sobriety or a minimum personal income. These policies are proven to improve housing stability and public health while reducing the costs of homelessness to individuals and their communities.  

In November 2025, the Trump administration attempted to impose new conditions on its CoC grant program in violation of congressional intent by dramatically reducing the amount of grant funds that can be spent on permanent housing and project renewals and putting new conditions on access to the funding. Congress has prioritized stability in the way the funds are allocated, and the vast majority of CoC funds have traditionally supported permanent housing and other projects that have been shown to provide meaningful support for those experiencing homelessness and housing instability.  In November of 2025, HUD published notices of funding opportunities that set a 30% cap on CoC funding. A coalition of attorneys general and the governors of Pennsylvania and Kentucky immediately sued the administration. In June 2026 the court ruled that HUD’s conditions on CoC funding were unlawful and could not be implemented.   

On June 1, 2026, HUD sought again to re-implement a cap on funding for permanent housing and set other unlawful conditions on the funds. Without action by the court, HUD’s actions mean CoC-funded permanent housing projects will lose funding or see it reduced, resulting in tens of thousands of people being evicted back to the streets, with states and local governments left to pick up the pieces. The new notice of funding opportunity issued by HUD attempts to re-implement a cap on permanent housing by creating a $1.3 billion set-aside for new projects prioritizing such things as transitional housing. By making this $1.3 billion unavailable for permanent housing, this “set aside” has the effect of capping permanent housing. That shift threatens housing for at least 97,000 residents of CoC-funded permanent housing across the country.   

The coalition is asking the court to declare that the challenged conditions are illegal and block HUD from implementing them. 

On August 7, 2026, the court granted critical parts of the state coalition’s motion for summary judgment, ruling that HUD’s conditions on CoC funding are unlawful and cannot be implemented.