20 States Sue Trump Administration Over Cuts and Conditions on Homeless Funding

On Tuesday, a coalition of 20 U.S. states, led by New York Attorney General Letitia James along with two governors, filed a lawsuit seeking to block the Trump administration’s recent alterations to the Department of Housing and Urban Development’s (HUD) Continuum of Care (CoC) program. The lawsuit objects to significant cuts and new conditions imposed on funding meant to support housing and services for homeless Americans.​

The coalition claims the administration’s modifications violate congressional intent by sharply reducing the share of federal grant funds that can be allocated to permanent housing solutions, while introducing conditions that discriminate against LGBTQ people and other communities not aligned with the administration’s policies.​

What’s at Stake?

Founded by Congress in 1987, the CoC program has long been a critical source of support for thousands of nonprofits and local governments, prioritizing permanent housing for veterans, families, and people with disabilities. The program’s grants enable case management, healthcare services, and other supportive care vital for transitioning homeless individuals into stable living conditions.

According to the lawsuit, HUD’s recent changes slashed permissible spending on permanent housing from nearly 90% to only 30%, instead steering funds toward short-term shelters and contingent supports. States argue these changes jeopardize housing for over 170,000 people, threatening to return many to homelessness.​

Targeting Vulnerable Communities

An additional point of contention is HUD’s imposed requirement that recipients recognize only two genders. The lawsuit asserts this places illegal constraints on funding access, particularly impacting organizations supporting transgender, nonbinary, and other LGBTQ individuals. Critics say these conditions violate federal anti-discrimination laws, constitutional spending rules, and undermine the original intent of Congress for equal access to aid.​

The lawsuit further claims that the Trump administration discriminates by deducting funding points from applicants deemed politically misaligned with its policy priorities, essentially punishing jurisdictions and providers whose approaches to homelessness differ.​

Voices from the States

Rhode Island Attorney General Peter Neronha condemned the policy changes as a continuation of an administration pattern targeting society’s most vulnerable. “This is a punch down on homeless individuals that will only worsen already dire struggles,” he said. Similar sentiments echoed from coalition members including California, Illinois, Pennsylvania, Arizona, Kentucky, and others—all emphasizing their commitment to protecting homeless residents and ensuring Congress’s original funding intentions are respected.​

Attorney General Letitia James stated that the administration lacks authority to impose ideological or political conditions on funds Congress earmarked to be distributed based on need. The lawsuit is thus an attempt to restore the CoC program’s integrity and prevent a massive rollback of permanent housing options.​

Administration’s Perspective and Justification

HUD Secretary Scott Turner has defended the policy shift as a necessary correction of what the administration sees as a flawed “housing first” approach that prioritizes permanent housing without preconditions. Turner argues the previous framework allowed the emergence of a “homeless industrial complex” insufficiently focused on underlying causes such as substance abuse and mental health issues.​

Turner emphasized that the reformed policies include protections for vulnerable groups like children, veterans, and seniors but shift funding toward transitional housing and health interventions. The administration urges states and cities to clear homeless encampments and direct individuals into treatment facilities, aiming to address root problems to reduce homelessness long term.​

Wider Political and Social Implications

The lawsuit raises broader questions about the roles of federal and local governments, the boundaries of administrative power, and the political dimensions of homelessness policy. Lawmakers from both parties have expressed concern over the abruptness of changes, speedy application deadlines, and the lack of clear research supporting the new strategy.​

Over 1,000 organizations at the national and state level issued letters demanding restoration and extension of CoC grants expiring in 2026, emphasizing that cuts would devastate ongoing programs. Even some Republicans have called for reconsideration or delay until adequate consultation and impact assessments occur.​

What This Means for Homeless Americans

For thousands of individuals and families currently benefiting from permanent supportive housing programs, the stakes are enormous. Losing access to grants could mean evictions, loss of services, and forced returns to unstable living situations. Advocates warn that reducing permanent housing options undermines gains made over years in reducing chronic homelessness, and could increase adverse health, safety, and societal costs.​

Legal Battle and Policy Debate

The lawsuit filed in Rhode Island federal court seeks an injunction—a court order to halt the unfolding funding cuts and conditions while the legal issues are resolved. Given the scope and national significance, the case will be closely watched by policymakers, housing advocates, and other stakeholders.

In tandem, continued advocacy and legislative pressure aim to influence Congress to clarify spending requirements, extend expiring grants, and resist further politically motivated administrative changes to homelessness assistance.​

Upholding Congressional Intent and Protecting the Vulnerable

The conflict over HUD’s Continuum of Care program funding highlights deep tensions between political priorities, administrative authority, and the needs of vulnerable Americans. Twenty states have come together to uphold the original Congressional vision centered on permanent housing solutions—seeking to prevent what they describe as harmful cuts and discriminatory conditions pushed by the Trump administration.

The outcome of this lawsuit will have profound implications not only for federal homelessness funding but for how policy is crafted and executed in a divided political climate. For now, tens of thousands of homeless Americans await clarity, stability, and the continued lifeline that permanent housing programs have long provided.

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