Full Breakdown
Appeals Court Allows Trump Administration to Proceed with Overhaul of HUD’s Continuum of Care Homelessness Program
By Drooid · · How we work
Core Event: Federal Appeals Court Grants Stay for HUD Funding Changes
On September 16, a three-judge panel of the Boston-based 1st U.S. Circuit Court of Appeals issued a stay that temporarily pauses a Rhode Island district court’s ruling blocking HUD’s plan to reshape the Continuum of Care (CoC) program. The panel said HUD has shown a strong likelihood of succeeding on appeal and would suffer irreparable injury if the lower-court order remained, noting that HUD must award CoC funds by December 1, 2026.
Background & Context
The CoC program, created in 1987 and codified in 2009, distributes federal homelessness assistance to states, local governments, tribal governments, and nonprofits. Historically it follows a “housing-first” model that prioritizes permanent housing without preconditions. The Trump administration has proposed shifting a portion of the program’s $4 billion 2026 allocation toward temporary housing, recovery services, and other supportive measures.
Key Figures & Groups
- Scott Turner — HUD Secretary; defended the shift, arguing that “housing alone will not solve” homelessness.
- Mary McElroy — U.S. District Judge (Providence, Rhode Island); blocked HUD’s changes in 2025 and again in 2026 for failing the notice-and-comment requirement.
- Lara Montecalvo, Seth Aframe, Joshua Dunlap — 1st Circuit judges who authored the stay.
- National Alliance to End Homelessness and a coalition of 22 Democratic-led states, D.C., and advocacy groups; plaintiffs challenging HUD’s plan.
Timeline
- 1987 – CoC program established.
- 2009 – Congress codifies the CoC program.
- 2025 – Judge McElroy blocks HUD’s proposed changes.
- August 2026 – Judge McElroy again sets aside HUD’s 2026 funding plan.
- September 16 2026 – 1st Circuit grants HUD a stay.
- December 1 2026 – Deadline for HUD to award CoC funds.
Data & Statistics
- $4 billion – total federal funding for fiscal year 2026.
- $1.3 billion – earmarked for transitional housing and supportive-service-only grants.
- $75 million – sought for building housing for homeless families and individuals.
- The program serves veterans, families, people with disabilities, and individuals fleeing violence.
Official Statements & Responses
HUD Secretary Turner called the appellate decision a “win for taxpayers” and said the changes aim to deliver “real and lasting results.” The 1st Circuit panel warned that HUD would face “irreparable injury” without the stay because of the looming December 1 2026 award deadline.
Plaintiffs, including the National Alliance to End Homelessness, expressed disappointment, saying the ruling revives HUD’s attempt to “radically upend” the program and could threaten “100,000 Americans” with homelessness by defunding permanent housing solutions.
Criticism & Opposition
Plaintiffs argue that diverting $1.3 billion from permanent housing to transitional services would unlawfully reduce funding for permanent projects and place tens of thousands of formerly housed individuals at risk. They contend the shift undermines the housing-first model that has driven the program’s success.
What’s Next
The case will continue before the 1st Circuit, which has not issued a final ruling on the notice-and-comment issue. HUD must still meet the December 1 2026 deadline to award CoC funds, and the agency’s ability to implement the revised funding structure remains pending appeal outcomes.