US Appeals Court Lets Trump Administration Reshape $4 Billion Homelessness Program
The 1st US Circuit Court of Appeals paused a lower court order, allowing HUD to redirect $1.3 billion within the Continuum of Care program while its appeal proceeds.
A federal appeals court has allowed the Trump administration to move ahead with changes to a $4 billion homelessness assistance program, lifting a lower-court block while the government's appeal continues.
A three-judge panel of the Boston-based 1st US Circuit Court of Appeals on Wednesday stayed a ruling by US District Judge Mary McElroy in Providence, Rhode Island, that had prevented the Department of Housing and Urban Development from altering how grant money is awarded under the Continuum of Care program.
The dispute centres on HUD's plan to set aside $1.3 billion of the more than $4 billion Congress appropriated for the programme in fiscal year 2026 for transitional housing and supportive service-only grants. The shift would move funding away from permanent housing assistance.
Since 1987, the Continuum of Care programme has channelled resources to states, local governments and non-profit groups that serve homeless people, with a focus on veterans, families and people with disabilities. It has long followed a housing-first approach, which prioritises placing people in permanent housing without preconditions such as sobriety or employment. Grants also fund childcare, job training, mental health counselling and transportation.
The administration has criticised the housing-first model and sought to redirect money toward temporary housing and supportive services.
McElroy blocked the changes in 2025 and again last month in lawsuits filed by 22 mostly Democratic-led states, the District of Columbia and a coalition of homelessness, housing and domestic-violence advocacy groups. The plaintiffs argued the move would unlawfully cut funding for permanent housing projects and put tens of thousands of formerly homeless people at risk of losing their homes.
The judge, a Trump appointee initially nominated by former Democratic President Barack Obama, found the change violated the Administrative Procedure Act because the public should have had a chance to comment on it before adoption.
The appeals panel said the administration was likely to succeed on appeal in establishing that setting aside the $1.3 billion was not subject to notice-and-comment requirements. It added that HUD would suffer irreparable injury without a stay, since the department has until December 1, 2026, to make awards to Continuum of Care applicants.
The panel comprised two Democratic appointees and one judge appointed by Trump. HUD did not respond to a request for comment, and the plaintiffs had no immediate comment.