Overview
- The 1st U.S. Circuit Court of Appeals on Wednesday refused to pause a lower-court order, leaving HUD barred from enforcing new grant conditions for the Continuum of Care program.
- That appellate move followed Tuesday’s ruling by U.S. District Judge Mary McElroy in Rhode Island, who found HUD’s late‑stage NOFO rewrite unlawful under the Administrative Procedure Act and ordered it scrapped.
- HUD’s plan would have shifted funding away from the long‑standing “housing‑first” model toward transitional housing with work requirements and public‑safety conditions such as cooperation with law enforcement and bans on illegal drug use.
- Plaintiffs said the change risked more than $2 billion supporting about 4,000 local coalitions, and the appeals court warned a stay could shutter providers and push people out of stable homes, including nearly 200,000 residents.
- The case now proceeds on appeal, and funding continues under prior rules for permanent housing and related services that the program has supported since 1987.