Attorney General Anthony G. Brown and a coalition of 20 states filed a lawsuit alleging that the U.S. Department of Housing and Urban Development (HUD) is unlawfully changing its Continuum of Care grant program in ways that will sharply limit access to permanent housing and related services for people experiencing homelessness or housing insecurity.
The lawsuit claims HUD is violating congressional intent by significantly reducing the share of grant funds that can be used for permanent housing and project renewals and by imposing new conditions on funding eligibility. The states allege the changes would require providers to enforce policies aligned with the Trump administration’s views on gender identity, mandate participation in services as a condition of housing, and penalize providers in jurisdictions that do not enforce strict anti-homeless laws.
According to the complaint, HUD has historically made gradual changes to the program to allow providers to budget and plan without disrupting housing stability. The states argue the new, broad changes will create administrative challenges and could result in thousands of people losing housing.
Attorney General Brown said the policies would force more than 4,000 Maryland residents out of their homes.
Continuum of Care grants, created by Congress, are used by local and regional coalitions to coordinate housing and services for people experiencing homelessness. Providers combine these grants with other funding sources and rely on their stability to maintain housing programs.
HUD has long promoted a “Housing First” approach, which prioritizes providing stable housing without requirements such as sobriety or income. The lawsuit states that these policies have improved housing stability and public health while reducing overall costs associated with homelessness.
Historically, about 90% of Continuum of Care funding has supported permanent housing. Under a new HUD rule set to apply to grants beginning in 2026, that share would be reduced by roughly two-thirds. HUD has also reduced the amount of funding protected for annual project renewals from about 90% to 30%, which the plaintiffs say will lead to evictions when projects are not renewed through no fault of residents.
Maryland’s Department of Housing and Community Development estimates the 30% cap will result in more than $45 million in statewide cuts to permanent housing projects and more than 4,000 individuals losing housing assistance.
The lawsuit also challenges planned requirements that applicants enforce federal policies on gender identity, deprioritize services for individuals with mental health or substance-use disorders, and discriminate against jurisdictions with differing approaches to homelessness.
The plaintiffs allege HUD violated its own regulations by issuing the changes without formal rulemaking and acted without congressional authorization. The complaint also claims HUD’s actions are arbitrary and capricious, citing the agency’s failure to justify abandoning longstanding policies or consider the consequences, including widespread evictions. The lawsuit notes HUD encouraged Housing First policies and attention to LGBTQ+ needs as recently as last year.
Joining Attorney General Brown in the lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Maine, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, as well as the governors of Kentucky and Pennsylvania.
