WASHINGTON (TNND) — A federal judge on Friday halted the Trump administration’s attempt to overhaul a major federal homelessness program, blocking changes that could have redirected billions of dollars away from permanent housing programs and put tens of thousands of people at risk of losing stable shelter.
U.S. District Judge Mary McElroy granted a preliminary injunction preventing the Department of Housing and Urban Development (HUD) from altering how more than $3 billion in Continuum of Care grant funding is distributed. The ruling requires HUD to continue operating the program under its existing rules while the legal challenge moves forward.
The lawsuit was brought by a coalition of 20 states, Washington, D.C., along with local governments and nonprofit organizations.
The plantiffs argued that HUD’s proposed changes would significantly reduce funding for permanent housing programs and replace them with temporary, transitional housing models that include work or service requirements. According to the plaintiffs, those changes could jeopardize housing for roughly 170,000 people nationwide.
McElroy said HUD’s actions likely conflicted with the McKinney-Vento Homeless Assistance Act, the federal law governing the program. She noted that Congress designed the Continuum of Care system to prioritize long-term housing stability and renewal funding.
“Ensuring lawful agency action and continuity of housing and stability for vulnerable populations is clearly in the public interest,” McElroy said during the hearing.
“It’s concerning to the court that we sort of keep having these cases where the agency issues these orders or memos or changes of policy, but they haven’t done the work to get that policy through. And so it sort of begs the question, are they really intending to change the policy, or is the chaos the point?”
The department had withdrawn a revised funding notice shortly before an earlier court hearing and told the court it planned to issue a new version later. McElroy suggested that the timing appeared calculated to avoid judicial review, calling it “concerning” and potentially an evasion of the court’s authority.
HUD officials defended their broader goals after the ruling. In a statement, a spokesperson said the agency “remains committed to program reforms intended to assist our nation’s most vulnerable citizens and will continue to do so in accordance with the law.”
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McElroy’s ruling maintains the current funding framework until HUD issues any new guidance through a process that complies with federal law. The judge said she expects to issue a written order formalizing the injunction early next week.