Judge Voids HUD's $4.04 Billion Homelessness Funding Shift for 2025 as 2026 Plan Stands
Updated
Updated · POLITICO · Jun 30
Judge Voids HUD's $4.04 Billion Homelessness Funding Shift for 2025 as 2026 Plan Stands
2 articles · Updated · POLITICO · Jun 30
Summary
Mary McElroy struck down HUD’s fiscal 2025 Continuum of Care funding changes, ruling the agency’s rapid move away from “housing first” violated the Administrative Procedure Act.
The decision said HUD had “hastily” eliminated the long-standing permanent-housing approach without reasoned decision-making, even as Secretary Scott Turner’s team argued the model had failed and should give way to temporary housing, recovery and self-sufficiency.
The ruling applies only to 2025 funds, which have not been fully disbursed; HUD has slowed grant agreements, issuing 29 in the past week after 80 the week before.
McElroy refused to extend the case to fiscal 2026 or impose a broader permanent injunction, leaving HUD’s June plan to steer the program’s $4.04 billion 2026 competition toward non-permanent housing priorities intact for now.
Plaintiff National Alliance to End Homelessness said it is weighing further legal action, underscoring a wider fight over whether federal homelessness grants should prioritize permanent housing or outcome-based alternatives.