December 5, 2025

National Alliance to End Homelessness v. HUD:
fact sheet

Toplines

• Nearly $4 billion in federal homelessness funding is being hijacked for politics instead of housing — including more than $266 million that the local governments in the case rely on to keep people housed.
• HUD’s new plans will put 170,000 people with disabilities and other vulnerable residents at risk of losing long-term supportive housing, starting as soon as this winter.
• By ripping up a nationwide network of stable anti-homelessness programs midstream, the administration is destabilizing local systems, breaking commitments communities relied on, and undermining Congress’s plan for how these funds should be used.
• Cities and counties know that investing in stable permanent housing works.. They are in court to stop unlawful changes that will push more people onto the streets, strain shelters, hospitals, and jails, and dump the fallout onto local residents and budgets.

Background

Case overview

What is this case about?

• The lawsuit challenges HUD’s decision to stop in the middle of an already-issued two-year grant program and replace it at the last minute with a new notice that radically changes the rules, cuts permanent housing, and delays funding for months. 

What is the Continuum of Care (CoC) program?

• The CoC grant program is HUD’s primary vehicle for addressing homelessness in the United States. With a budget of $3.9 billion for the coming year, CoC funds regional systems that provide permanent supportive housing, rapid rehousing, shelter, outreach, and services for people experiencing or exiting homelessness. 

What did HUD change?

• In 2024, HUD made awards that cover both FY 2024 and FY 2025, allowing communities to plan budgets and programs accordingly. 
• On November 13, 2025, just weeks before FY 2025 awards were expected, HUD abruptly rescinded the two-year plan and issued a new one for FY 2025 only. 
• HUD’s new plan will delay awards until May 2026 at the earliest, even though grants begin expiring in January — creating months-long funding gaps that will force programs to close or drastically scale back. 
• The new plan makes dramatic policy changes, upending more than a decade of anti-homelessness policy backed by evidence.

What does the new NOFO do?

• Cuts funding for permanent supportive housing by roughly two-thirds, even though Congress has repeatedly instructed HUD to prioritize housing and stability. 
• Shifts funds toward short-term, punitive models and encourages criminalization of homelessness. 
• Adds new and retroactive ideological conditions — including restrictions related to “racial preferences” and a narrow, binary definition of sex — and excludes mental health conditions from the list of qualifying disabilities, contrary to prior law and guidance. 

Why this case matters

• Congress designed CoC to prioritize permanent housing, stability, and local decision-making. The HEARTH Act requires HUD to prioritize proven strategies like permanent supportive housing and rapid rehousing, and to make renewals predictable so communities can keep people housed and maintain stable systems of care
• HUD is reversing course without legal authority. HUD’s abrupt rescission and replacement of the two-year plan came months after the deadlines for issuing a funding notice and without a reasoned explanation for the disruption. The agency is ignoring congressional mandates, its own regulations, and the real-world reliance interests of communities that built programs based on HUD’s earlier commitments.
• The new NOFO punishes communities for following prior HUD rules. Programs that complied with earlier requirements to advance racial equity and track gender diversity can be disqualified under new “racial preference” and “binary sex” conditions, even though they were following previous HUD regulations and guidance.
• This is about more than one grant cycle. The administration has attempted to retroactively rewrite a multi-billion-dollar homelessness program to impose unlawful conditions and destabilize permanent housing.

What’s at stake

• People’s lives and programs are at risk 

• • The new NOFO jeopardizes housing for more than 170,000 people, many with disabilities, nationwide who currently rely on CoC-funded permanent supportive housing. 
  • Thousands of nonprofit providers face sudden funding gaps and may be forced to shut down programs or evict residents as grants expire months before new awards are made.

• Local government impact 

• • Boston relies on nearly $48 million annually in CoC funds; about 90% of that money supports permanent housing for over 1,600 households, including people with disabilities, children, seniors, and veterans. Forced funding gaps could displace more than 1,100 households in permanent housing and overwhelm shelter capacity that is already overstretched, just as winter starts. 
  • Cambridge uses over $6.3 million in CoC funding to provide permanent housing and rapid rehousing, including for survivors of domestic violence. Short timelines and new criteria could cause over 200 stably housed participants to lose support. 
  • King County (Seattle region), Nashville, Santa Clara County, San Francisco, and Tucson similarly depend on CoC funding to maintain permanent supportive housing and critical services for thousands of residents with the highest needs; many grants expire before HUD’s new award date, creating immediate risks of closure and displacement.

• Systems-level impacts

• • Communities must redo months of planning “on a dime,” redesigning programs, running local competitions, and re-applying for funding over the holidays on an impossibly compressed timeline. This diverts staff from winter shelter, outreach, and other life-saving responsibilities.
    By cutting permanent housing and pushing short-term, conditional models, HUD’s changes will drive more people into emergency rooms and short-term emergency shelters that are already beyond capacity — raising costs for local governments and straining public health and social services systems.

Who will benefit from this lawsuit

• People in permanent supportive housing and other CoC-funded programs
  The case seeks to prevent thousands of households—especially people with disabilities, seniors, veterans, youth, and families with children—from losing stable housing and services as a result of HUD’s unlawful policy changes. 
• Communities facing housing and homelessness crises
  Cities and counties across the country depend on CoC funding to maintain safety nets, prevent encampments from growing, and keep shelters and hospitals from being overwhelmed.
• Nonprofit providers and frontline staff
  An injunction would allow providers to rely on the original two-year competition and maintain continuity of care, instead of scrambling to overhaul programs or shut them down.
• People who care about lawful, accountable government
  The lawsuit defends Congress’s role in setting federal housing policy, prevents the executive branch from unilaterally rewriting statutes, and reinforces limits on using federal funds as a political weapon. 

Legal milestones and updates

• December 1, 2025:
  • Plaintiffs filed National Alliance to End Homelessness, et al. v. U.S. Department of Housing and Urban Development & Scott Turner in the U.S. District Court for the District of Rhode Island. 
  • Claims:
    • The complaint alleges that HUD’s rescission of the two-year CoC NOFO and issuance of the new FY 2025 NOFO violate the Administrative Procedure Act and the U.S. Constitution, including by acting contrary to statutory provisions governing the CoC program, timing requirements, and limits on imposing retroactive conditions on federal funds.  
    • Plaintiffs ask the court to set aside the rescission and replacement of the two-year grants, block HUD from enforcing the unlawful terms of the new plan, and preserve funding for permanent housing and other lawful CoC activities while the case proceeds.