Judge Blocks HUD From Rewriting $4 Billion in Homelessness Grants — the Third Such Ruling Against the Department

U.S. District Judge Mary McElroy on Aug. 7, 2026 blocked the Department of Housing and Urban Development from changing how it awards Continuum of Care funding, finding the department had issued its latest notice of funding opportunity in a procedurally invalid manner. The program sends about $4 billion to local organizations that serve people experiencing homelessness. HUD Secretary Scott Turner has criticized the program for prioritizing permanent placements under the Housing First model and has sought to redirect money toward temporary housing and services.

With this decision, federal judges have now ruled three times against similar HUD attempts, raising the question of whether the department can accomplish the shift without formal rulemaking.

New York Attorney General Letitia James, one of the plaintiffs, said the funds keep some of the most vulnerable people in stable housing and accused the department of a pattern of ignoring the law. HUD has not said publicly whether it will appeal.