A federal appeals court in Boston cleared the way for President Trump’s administration to restructure a $4 billion homelessness assistance program. The 1st U.S. Circuit Court of Appeals ruled that the Department of Housing and Urban Development (HUD) can set aside $1.3 billion of the 2026 appropriations for transitional housing and supportive‑service grants, despite a prior district‑court injunction.
Background on the Continuum of Care program
Since 1987, the Continuum of Care (CoC) program has funneled federal dollars to states, local governments and nonprofit agencies that serve homeless individuals, with a particular focus on veterans, families and people with disabilities. Historically, the CoC has operated under a housing‑first model, which places participants directly into permanent housing without requiring sobriety, employment or other preconditions. Grants also fund ancillary services such as childcare, job training, mental‑health counseling and transportation.
Administration’s criticism and proposed changes
The Trump administration has argued that the housing‑first approach does not adequately address the immediate needs of those experiencing homelessness. By redirecting a portion of the funding to temporary housing and supportive‑service only grants, HUD aims to provide rapid shelter and wrap‑around assistance while still moving people toward long‑term stability.
Legal battle and court rulings
U.S. District Judge Mary McElroy in Providence, a Trump appointee, blocked HUD’s plan in 2025 and again last month, finding that the agency had not complied with the Administrative Procedure Act’s notice‑and‑comment requirements. The plaintiffs—22 mostly Democratic‑led states, the District of Columbia and a coalition of homelessness, housing and domestic‑violence advocacy groups—contended that the shift would unlawfully reduce funding for permanent housing projects and jeopardize the housing security of tens of thousands of formerly homeless individuals.
In its decision, the three‑judge panel, which includes two Democratic appointees and one Trump‑appointed judge, concluded that HUD’s allocation of $1.3 billion for transitional housing and supportive services is likely not subject to the notice‑and‑comment rule. The panel noted that HUD would suffer “irreparable injury” if a stay were not granted, given the agency’s December 1, 2026 deadline to award CoC funds.
Implications for states and service providers
Should the administration’s plan survive further appeals, states and local jurisdictions will receive new guidance on how to apply the redirected funds. Organizations that rely on CoC grants for permanent‑housing projects may need to adjust their service models, while providers of temporary shelter and supportive services could see a boost in federal resources.
HUD has not responded to a request for comment. The plaintiffs also declined to comment at this time.
What this means for families and communities
For families struggling with homelessness, the shift could mean faster access to emergency shelter and targeted assistance such as childcare and job‑training programs. Critics warn that reducing permanent‑housing allocations may prolong the cycle of homelessness for some, but the administration maintains that a balanced approach—combining immediate shelter with supportive services—better serves vulnerable populations.
The case underscores the ongoing debate over the most effective federal strategy to combat homelessness, a challenge that touches millions of Americans and aligns with the Trump administration’s broader effort to reform federal welfare programs.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
