Court blocks HUD’s shift away from Housing First in homelessness funding

A Rhode Island federal judge ruled that HUD’s fiscal 2025 changes to the Continuum of Care program, which aimed to shift funding from permanent housing to temporary housing and services and move away from a Housing First approach, were arbitrary and capricious and violated the Administrative Procedure Act. The decision blocks the 2025 funding changes, though it did not grant a permanent injunction against the broader policy shift; litigation over 2026 funding remains possible. HUD argues the overhaul aims to fund outcomes and merit, while plaintiffs warn the changes will harm communities by creating funding gaps for permanent housing.