Attorney General Phil Weiser sues HUD to block new changes to homelessness funding

Attorney General Phil Weiser sues HUD to block new changes to homelessness funding

July 7, 2026 (DENVER) - The U.S. Department of Housing and Urban Development is attempting yet again to unlawfully cap funding for permanent housing projects, in a move that would result in tens of thousands of people losing their homes, Attorney General Phil Weiser and a multistate coalition argued in a lawsuit filed in federal court today.

Just last month, the states won a separate case against HUD in federal court in Rhode Island regarding the agency's decision last year to impose illegal conditions on billions of dollars in funding for the Continuum of Care (CoC) program, which supports housing and other services for people experiencing housing instability or homelessness. Congress has prioritized stability in the way the funds are allocated, and the vast majority of CoC funds have traditionally supported permanent housing and other projects that have been shown to work.

On June 1, HUD issued a notice of funding opportunity that creates a $1.3 billion set-aside for new projects prioritizing such things as transitional housing, which results in a de facto cap on permanent housing. That shift threatens housing for at least 97,000 residents of CoC-funded permanent housing across the country, according to the National Alliance to End Homelessness.

"Again, HUD is trying to cap funding for permanent housing and set other unlawful conditions on the funds. Without action by the court, permanent housing projects will lose funding or see it reduced, resulting in tens of thousands of people being evicted back to the streets, with states and local governments left to pick up the pieces. These actions will make it harder for states to address homelessness," said Attorney General Weiser.

The states argue that HUD's actions violate the Administrative Procedure Act for, among other things, failing to proceed with notice-and-comment rulemaking and being arbitrary and capricious. They ask the court to declare that the challenged conditions are illegal and block HUD from implementing them.

Attorney General Weiser joined the attorneys general of Arizona, California, Connecticut, the District of Columbia, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, and the governors of Kentucky and Pennsylvania, in filing the lawsuit.

Read a copy of the complaint (PDF).

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