HUD conditioned $1.3B in FY2026 homelessness grants on immigration-enforcement cooperation and anti-DEI/anti-trans compliance

On June 1, 2026, the U.S. Department of Housing and Urban Development published its Fiscal Year 2026 Continuum of Care Notice of Funding Opportunity, redirecting roughly $1.3 billion of the program's nearly $4 billion in nationwide homelessness grants away from "Housing First" permanent supportive housing models toward transitional housing and "self-sufficiency" projects. The notice conditions Continuum of Care grants on compliance with federal immigration enforcement, adherence to executive orders eliminating diversity, equity, and inclusion activities and recognizing only male and female gender identities, and a bar on funding applicants that operate safe-consumption or drug-injection sites. It also rewards jurisdictions that demonstrate cooperation with encampment-clearing efforts.

The notice follows a federal court's June 29, 2026 ruling striking down HUD's substantially similar FY2025 version of the same Continuum of Care notice. A coalition led by the National Alliance to End Homelessness, the National Low Income Housing Coalition, Democracy Forward, the National Homelessness Law Center, and the ACLU of Rhode Island sued HUD in Rhode Island federal court on July 2, 2026 seeking to block the FY2026 notice on similar grounds.

Updates

2026-07-02 — Coalition sued HUD in Rhode Island federal court to block the FY2026 notice [2]

A coalition of homelessness and civil-liberties organizations, including the National Alliance to End Homelessness, the National Low Income Housing Coalition, Democracy Forward, the National Homelessness Law Center, and the ACLU of Rhode Island, filed suit against HUD in Rhode Island federal court seeking to block the FY2026 Continuum of Care notice, days after the same court struck down HUD's similar FY2025 version.

2026-07-07 — Multistate coalition sued HUD over the same FY2026 notice [3, 4]

A separate coalition of 20 states, the District of Columbia, and the governors of Kentucky and Pennsylvania — led by the attorneys general of Washington, New York, and Rhode Island — sued HUD in Rhode Island federal court, arguing the FY2026 notice's $1.3 billion set-aside for transitional housing unlawfully caps permanent supportive housing funding at roughly 68% of Continuum of Care resources. The suit is separate from the July 2, 2026 nonprofit-coalition suit already recorded above, and follows a similar multistate suit in November 2025 that succeeded in blocking an earlier, more restrictive version of the same funding cap.