Appeals Court rejects Trump Administration attack on funding for solutions to homelessness

SAN FRANCISCO, CA (April 1, 2026) — San Francisco City Attorney David Chiu and Santa Clara County Counsel Tony LoPresti issued the following statements today after the First Circuit Court of Appeals rejected a Federal Administration request to overturn a court order blocking the administration’s attempts to implement unlawful and unreasonable restrictions that seek to shift funding away from proven solutions to homelessness.

On December 1, 2025, San Francisco and Santa Clara County joined a broad coalition of cities and nonprofit organizations and filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) for unlawful restrictions on its Continuum of Care (CoC) Program. The lawsuit seeks to prevent HUD’s harmful attempt to stop funding permanent housing that keep nearly 200,000 Americans out of homelessness.

“The Continuum of Care program provides tens of millions in funding to house thousands of our most vulnerable,” said San Francisco City Attorney Chiu. “San Francisco has relied on this program for decades to fund critical, permanent supportive housing. We are grateful the Court blocked the Federal Administration’s attempt to push our most vulnerable residents out of their homes with nowhere to go. We will continue to oppose these efforts and stand up for San Francisco’s values, funding, and communities.”

“The First Circuit’s decision to prohibit HUD from imposing new grant rules while the litigation proceeds is a victory not only for the rule of law, but also against this federal administration’s attempts to defund permanent housing programs and jeopardize the stability of thousands of Bay Area families,” said Santa Clara County Counsel Tony LoPresti. “These unlawful rule changes are yet another instance of the Trump administration prioritizing its political agenda above the needs of our most vulnerable community members.  We will continue to stand up for effective housing solutions that prevent homelessness in our communities.”

Background
Through multiple federal administrations, the HUD CoC Program helped provide the necessary resources for local governments and organizations to fund permanent housing projects for veterans, seniors, people with disabilities, and individuals and families with children experiencing homelessness.

On November 13, 2025, without explanation, HUD rescinded the two-year notice of funding opportunity (NOFO) that should have governed FY 2025 awards and replaced it with one that threatens existing services, which could push nearly 200,000 Americans into homelessness. It then issued yet another new NOFO a month later. The new NOFO for FY 2025 upended the stability of the program required by law, and would have a devastating impact for communities, unhoused and previously unhoused children, youth, adults, and families, and the service providers who rely on federal funding to provide needed help.

A broad coalition of local governments and nonprofits took legal action to stop the new NOFO. In December 2025, a federal judge granted preliminary relief by temporarily blocking the administration’s attempts to implement unlawful and unreasonable restrictions on the CoC program. Today’s decision maintains that block and confirms that Congress’s recent law requiring HUD to renew existing grants does not mean that HUD may implement the unlawful conditions.

The coalition behind the lawsuit includes the National Alliance to End Homelessness (NAEH), the National Low Income Housing Coalition (NLIHC), Crossroads Rhode Island, Youth Pride, Inc., as well as San Francisco, CA, County of Santa Clara, CA, King County, WA, Boston, MA, Cambridge, MA, Nashville, TN, and Tucson, AZ.

San Francisco, Santa Clara County, and King County represent themselves. Democracy Forward and the ACLU Foundation of Rhode Island represent the coalition of nonprofits in the matter. The National Homelessness Law Center represents NAEH and NLIHC. The Public Rights Project represents the cities of Boston, Cambridge, Nashville, and Tucson. The Lawyers’ Committee for Rhode Island represents all plaintiffs.

The case is National Alliance to End Homelessness, et al. v. U.S. Department of Housing and Urban Development, et al., U.S. District Court for the District of Rhode Island, Case No. 1:25-cv-00636. Read the court’s recent order.