Attorney General Rayfield Wins Case Protecting Billions of Dollars for States to Fight Homelessness

Attorney General Dan Rayfield and a multistate coalition have won their lawsuit against the Trump administration's illegal conditions on $3 billion in federal housing funds. The funds, known as Continuum of Care (CoC) grants, help community organizations nationwide provide housing and services to people experiencing homelessness, including veterans, people with disabilities and other vulnerable community members.

"This lawsuit is about standing up for Oregon values and priorities. These conditions would have gutted the funding that helps veterans, people with disabilities, and entire communities who depend on these dollars for housing," said Attorney General Rayfield. "The Court agreed that Trump can't weaponize funding to decide who gets housing and who ends up on the streets."

In addition to AG Rayfield, the lawsuit was filed by the attorneys general of 18 other states and the governors of Kentucky and Pennsylvania. The U.S. District Court for the District of Rhode Island partially granted the coalition's motion for summary judgment, ruling that the restrictions that Housing and Urban Development (HUD) placed on CoC funding are unlawful and cannot be implemented.

Background

In November 2025, HUD issued illegal conditions on CoC grants that threatened funding that coalitions of community organizations receive to provide housing and other support for those experiencing homelessness. The administration imposed a cap on the amount of CoC funds that can support permanent supportive housing. If enacted, this cap would have slashed CoC funds for permanent supportive housing by two-thirds and put an estimated 170,000 people at risk of losing their homes.

HUD also imposed other conditions, barring CoC funds from organizations that acknowledge the existence of transgender or nonbinary individuals and excluding programs that provide services for mental disabilities. Attorney General Rayfield and the coalition argued in their lawsuit that these conditions violate the Administrative Procedure Act and Congress' constitutional power to control spending.

In a decision on the plaintiff states' motion for summary judgment, the court ruled that the conditions on CoC funding that HUD implemented in its 2025 Notice of Funding Opportunity (NOFO) violate the Administrative Procedure Act and cannot be implemented.

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