ATTORNEY GENERAL RAOUL SECURES COURT ORDER BLOCKING HUD PROPOSAL THAT WOULD HAVE LEFT THOUSANDS WITHOUT HOUSING

ATTORNEY GENERAL RAOUL SECURES COURT ORDER BLOCKING HUD PROPOSAL THAT WOULD HAVE LEFT THOUSANDS WITHOUT HOUSING

December 19, 2025

Chicago - Attorney General Kwame Raoul today announced a federal judge has ordered the U.S. Department of Housing and Urban Development (HUD) to preliminarily halt changes to its Continuum of Care grant program after Raoul and a coalition of states argued in court that the changes were illegal and would leave tens of thousands of people around the country without a place to live. The Continuum of Care grant program is the largest resource for federal homelessness assistance funding.

"The illegal changes proposed by the Trump administration threatened to throw tens of thousands of recently and stably housed individuals and families back into homelessness," Raoul said. "Congress established these vital grants to address the growing problem of homelessness that is affecting cities and states across our country. I am pleased with the court's action today, and I will continue to stand with my colleagues to push back against the president's illegal and illogical decisions."

In the order granting a preliminary injunction, U.S. District Court Judge Mary McElroy today barred HUD from implementing its proposed changes to the Continuum of Care program and directed the agency to process applications under the terms that existed prior to its unlawful program changes.

Raoul and a coalition of 20 attorneys general and two state governors sued HUD in November for illegally upending support for people experiencing housing insecurity or homelessness by abruptly rescinding a necessary program notice and replacing it with another that limited access to long-term housing and other services. Their lawsuit argues that HUD drastically changed its Continuum of Care grant program in violation of congressional intent by sharply reducing funding for permanent housing and putting unlawful conditions on access to funding. The illegal conditions include penalizing housing providers that recognize gender identity and diversity and mandating that housing program residents agree to additional conditions to obtain housing.

HUD also added illegal conditions to punish providers in localities that do not enforce strict anti-homeless laws and disadvantaged programs that address mental disabilities and substance use disorder. Those conditions go against HUD's previous guidance and were not authorized by Congress. The program notice was also issued well after HUD's congressionally-mandated deadline for making program changes, virtually guaranteeing gaps in funding.

In 2024, 19 regional Continuums of Care in Illinois that cover the entire state received more than $182 million in federal funding to support programs, including permanent supportive housing, rapid rehousing, transitional housing and a broad range of services. Illinois leverages this critical federal funding and matches it with significant state funding. In the last two years, Illinois has increased state funding to address and prevent homelessness by 154%.

In their complaint, Raoul and the coalition argued that HUD's actions were arbitrary and capricious, as HUD made no effort to explain the abandonment of its own longstanding policies, failed to reckon with the obvious consequences of abruptly terminating funding for housing occupied by formerly homeless families and individuals and violated the law by not following the timeline Congress set for this program and not receiving congressional authorization for these new conditions. The plaintiffs also argued HUD violated its own regulations by not engaging in rulemaking before issuing the changes.

Joining Attorney General Raoul in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin, along with the governors of Kentucky and Pennsylvania.