A Rhode Island federal judge has ordered the U.S. Department of Housing and Urban Development (HUD) to immediately disburse funds under a $75M Homelessness Grant, blocking what advocates claim was an unlawful attempt by the Trump administration to reshape the program with politically charged restrictions.

Court Blocks Funding Freeze

On Sunday, U.S. District Judge Mary S. McElroy granted a temporary restraining order requiring HUD to maintain payments through its Continuum of Care Builds program, designed to help communities create permanent supportive housing. The ruling halts federal officials from withholding funds awarded on Sept. 5 and suspends a statutory lapse until further court orders.

The lawsuit was filed by the National Alliance to End Homelessness and the Women’s Development Corp. (WDC), which accused the administration of hijacking the grant process to punish jurisdictions with policies it opposed.

Politics Versus Housing

Plaintiffs argued the administration’s last-minute changes weaponized homelessness policy for partisan aims. The new rules sought to exclude applicants operating in sanctuary cities or in areas that protect transgender rights, effectively blocking some service providers from funding eligibility.

“We welcome the court’s decision to stop a rushed, lawless attempt to make essential funding contingent on harmful restrictions,” the groups said in a joint statement. “This order ensures providers can focus on housing people in crisis, not politics.”

A Shifting Timeline

The case traces back to July 2024, when HUD published its initial notice of funding opportunity with a December deadline. But before grants were awarded, the Trump administration took office and scrapped the original pool.

HUD then reopened the process on May 16, 2025, with applications due by June 26. The agency even briefed Congress on selected proposals before abruptly issuing a new solicitation on Sept. 5 with just one week to apply.

Unlike prior rounds, the new bid focused exclusively on projects serving seniors and people with disabilities. The sudden shift forced applicants to overhaul months of planning, leaving organizations like WDC unable to compete fairly.

Lawyers Take Sides

The plaintiffs are represented by Antonia K. Fasanelli of the National Homelessness Law Center, along with a legal team from Democracy Forward Foundation and several private firms. The federal defendants are represented by Joshua N. Schopf of the DOJ’s Civil Division.

Government counsel has not yet commented on the ruling.

What’s Next

Judge McElroy’s order compels HUD to confirm compliance within three days, keeping funds flowing while the broader lawsuit plays out. The plaintiffs insist that for more than 30 years, HUD programs have been a lifeline for homeless service providers—until now.

“This case is about protecting resources that save lives,” the plaintiffs said. “We won’t allow political interference to strip communities of critical housing support.”