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Court Decision Prevents Trump Administration’s Illegal Conditions from Jeopardizing Funding for Continuum of Care Programs
LANSING – Michigan Attorney General Dana Nessel and a coalition of 18 other attorneys general and the governors of Kentucky and Pennsylvania won their case challenging illegal conditions that the Trump administration (PDF) imposed upon billions of dollars in funding that community organizations across the country rely on to provide housing and services for families experiencing homelessness. In November 2025, Attorney General Nessel joined the coalition in suing the Trump administration to protect more than $3 billion in Continuum of Care (CoC) funds that were jeopardized by illegal new conditions imposed by the Department of Housing and Urban Development (HUD). These funds support vital resources for those most at risk of homelessness, such as veterans, those with disabilities, and transgender individuals. Yesterday, the U.S. District Court for the District of Rhode Island granted critical parts of the coalition’s motion for summary judgment, ruling that HUD’s conditions on CoC funding are unlawful and cannot be implemented.
"While the Trump administration continues to try to deprive our communities of federal funding that supports everything from housing and food assistance to disaster relief by tying it to unlawful conditions, court after court has shut them down,” said Attorney General Nessel. “This significant win demonstrates once again that these lawsuits against the federal government have a profound impact on the lives of residents. We remain committed to fighting back against attempts to dismantle the resources that keep a roof over families’ heads or food on their tables.”
In November 2025, HUD issued a new grant application form containing illegal conditions on CoC grants. The illegal conditions threatened funding that coalitions of community organizations across the country receive to provide housing and other support for those experiencing homelessness. For example, the administration imposed a cap on the amount of CoC funds that can be used to support permanent supportive housing. If enacted, this cap would have slashed CoC funds for permanent supportive housing by two-thirds and put an estimated 170,000 people at risk of losing their homes.
HUD also imposed other conditions, barring CoC funds from organizations that acknowledge the existence of transgender or nonbinary individuals and excluding programs that provide services for those with mental disabilities. Attorney General Nessel and the coalition argued in their lawsuit that these conditions violate the Administrative Procedure Act and Congress’ constitutional power to control spending.
In a decision on Attorney General Nessel and the coalition’s motion for summary judgment, the court ruled that the conditions on CoC funding that HUD implemented in its November 2025 and December 2025 Notices of Funding Opportunity violate the Administrative Procedure Act and cannot be implemented.
Joining Attorney General Nessel in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania.
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