AG Wins Appeals Court Ruling Against HUD Over Housing Assistance Restrictions

AG: Maine News

Published April 2nd, 2026

Detected April 8th, 2026

Summary

The Maine Attorney General announced a First Circuit appeals court victory upholding a preliminary injunction against HUD's attempted restrictions on Continuum of Care program funding. The court rejected HUD's request to allow the restrictions to take effect, preserving federal homelessness assistance funding for tens of thousands of Americans. HUD had attempted to dramatically reduce grant funds for permanent housing and impose unlawful conditions on access to funding.

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What changed

A federal appeals court rejected HUD's attempt to impose restrictions on Continuum of Care homelessness assistance funding, upholding a preliminary injunction. The court found plaintiffs demonstrated ample evidence that the planned restrictions would be immediately destabilizing and disastrous for vulnerable populations. The ruling preserves funding that supports stable housing for more than 1,800 people in Maine alone, including families, seniors, veterans, and people with disabilities.\n\nAffected parties including state housing agencies, Continuums of Care organizations, and homelessness service providers can continue operations without disruption from the blocked HUD restrictions. More than 1,200 Maine individuals who would have lost housing under the proposed changes will remain in stable housing arrangements. State attorneys general and housing advocates should continue monitoring for any further HUD appeals or alternative policy approaches.

What to do next

Monitor for further HUD appeals or policy developments regarding Continuum of Care program restrictions

Source document (simplified)

Attorney General Aaron M. Frey Wins Appeals Court Ruling Against HUD Over Housing-Assistance Programs

April 2, 2026

FOR IMMEDIATE RELEASE

Contact: Danna Hayes

Danna.hayes@maine.gov

Attorney General Aaron M. Frey Wins Appeals Court Ruling Against HUD Over Housing-Assistance Programs

AUGUSTA – In a decisive win for Maine and other states, a federal appeals court rejected the federal government’s request to impose harmful restrictions on grant funding that allows tens of thousands of formerly homeless people across the country to remain in stable housing.

Attorney General Aaron M. Frey and a multistate coalition sued the U.S. Department of Housing and Urban Development (HUD) last November after HUD abruptly changed its Continuum of Care program, the largest resource for federal homelessness assistance funding. HUD dramatically reduced the amount of grant funds that can be spent on permanent housing and put unlawful conditions on access to the funding.

U.S. District Court Judge Mary McElroy sided with the states in December, saying HUD’s actions would cause irreparable harm to the plaintiffs, and issued a preliminary injunction barring HUD from implementing the unlawful restrictions. On April 1, the appeals court rejected HUD’s request to temporarily allow the restrictions to go into effect.

“When so many can barely afford basic necessities, the cruelty of threatening housing security for vulnerable Mainers to advance a political agenda is appalling,” said Attorney General Frey. “While this attempt by HUD was obviously unlawful, the stress and uncertainty the Administration created in a vulnerable population and the people working hard to support them is wholly unnecessary and deeply destructive.”

The appeals court said plaintiffs had provided ample evidence that if HUD moved ahead with its planned restrictions to the funding, the results would be “immediately destabilizing and disastrous for their constituents.”

"I applaud Attorney General Frey on this critical victory, which blocks the President’s callous attempt to take housing away from more than 1,200 Maine people. I will continue to stand alongside the Attorney General to fight back against the President’s abuses of power and attempts to harm Maine people," said Governor Janet Mills.

Continuum of Care programs support stable housing for more than 1,800 people across Maine -- including families with children, seniors, veterans, people with mental and physical disabilities, and survivors of domestic violence. Under HUD’s attempted changes, more than 1,200 of these individuals would have lost their housing and become homeless.

A copy of the appeals court judge’s ruling is available here: https://www.ca1.uscourts.gov/sites/ca1/files/opnfiles/26-1217P-01A.pdf.