HUD Appeals Court Ruling on Homelessness Grants

HUD Press Releases

Filed January 1st, 2026

Detected March 14th, 2026

Summary

The Department of Justice, on behalf of HUD, is appealing a Federal District Court of Rhode Island ruling that enjoined HUD's policies for awarding homelessness grants. HUD argues the ruling prevents reforms aimed at promoting self-sufficiency and instead supports warehousing individuals and potentially funding illicit activities.

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What changed

The Department of Justice, acting for HUD, has filed an appeal against a preliminary injunction issued by the Federal District Court of Rhode Island. This injunction prevents HUD from awarding homelessness grants under its revised policies, which aimed to exclude individuals involved with illicit drugs or those with criminal records, and to prioritize self-sufficiency over long-term warehousing. HUD contends the court's decision perpetuates a failing "Housing First" approach and hinders its ability to implement reforms, including those aligned with Executive Order 2025-XX, which seeks to address crime and disorder on streets.

This appeal signifies HUD's commitment to reforming its homelessness grant programs, particularly the Continuum of Care (CoC) program, and challenging the "homeless industrial complex." Regulated entities, primarily non-profits and government agencies receiving these grants, should be aware that the legal challenge could impact funding conditions and award processes. While the appeal is ongoing, the status of HUD's funding NOFO for FY25, which involves $3.9 billion, remains uncertain due to the litigation. The outcome of this appeal will determine whether HUD can proceed with its revised grant conditions or if the "Housing First" paradigm, as interpreted by the court, will continue to govern these significant federal funds.

What to do next

Monitor legal developments regarding HUD's appeal of the Rhode Island District Court ruling.
Review current grant agreements for potential impacts based on the ongoing litigation.
Prepare for potential changes in HUD's grant award criteria and conditions pending the appeal's outcome.

Source document (simplified)

1. News
2. HUD Appeals Judicial Decision to Shift Homelessness Paradigm

HUD Appeals Judicial Decision to Shift Homelessness Paradigm

Rejects Subsidized Drug Use, Half-Million Dollar Salaries, and Lifelong Handouts

Washington, DC - The Department of Justice (DOJ) on behalf of the Department of Housing and Urban Development (HUD) is appealing the Federal District Court of Rhode Island’s preliminary injunction. The injunction denies HUD the ability to award homelessness grants under its policies that protect homeless individuals from dangerous encampments, illicit drugs, and sex offenders, and orders the Department to spend billions of dollars on simply warehousing people. This action underscores HUD’s commitment to reform the misguided “Housing First” approach that funded the self-serving homeless industrial complex, rewarded activists, and ignored solutions. HUD is challenging the decision to support the status quo that now stands in the way of much needed reforms for homeless Americans.

“President Trump and Secretary Turner vowed a drastic paradigm shift in how America addresses homelessness. The homeless industrial complex promulgated Housing First, which has repeatedly failed vulnerable Americans. It has by every objective measure turned America’s streets into a petri dish of disease, drugs, and despair. HUD is doubling down for real solutions to this catastrophe and will continue to pursue every legal avenue to reform the homelessness system within the bounds of the law,” said Deputy Secretary Andrew Hughes.

In November 2025, HUD announced monumental reforms to the Continuum of Care (CoC) program, its key homelessness funding program intended to promote self-sufficiency, not government dependency. It is also intended to be a true competition designed to choose among the best available solutions and not an entitled slush fund. HUD’s FY25 Notice of Funding Opportunity (NOFO) invests $3.9 billion in housing with accompanying services, rather than rewarding grantees for simply warehousing able-bodied, non-elderly homeless individuals. This realignment effectuates President Donald J. Trump’s Executive Order, Ending Crime And Disorder On America’s Streets.

Through the use of weaponized litigation, twenty-one states, the District of Columbia, and a handful of activist groups and local municipalities sued HUD. This lawfare has blocked HUD’s ability to revise the funding conditions and select the best and most effective projects, delaying important funding deadlines.

The appeal puts HUD one step closer to providing dignity to our most vulnerable Americans, protecting billions of taxpayer dollars, and overturning the Court’s decision to perpetuate the failing status quo.

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