Lawsuit Filed Against HUD Over Unconstitutional Funding Restrictions for Housing Grants

A lawsuit was filed Thursday in the U.S. District Court for the District of Rhode Island against the U.S. Department of Housing and Urban Development (HUD) over unconstitutional funding restrictions for housing grants. The National Alliance to End Homelessness and the Women's Development Corporation (WDC) claim that HUD's new eligibility policy is unlawful and unconstitutional, as it prohibits applicants from being "sanctuary jurisdictions" for immigrants, providing "harm reduction" services for drug users, and having inclusive policies for transgender people.

The new funding opportunity, announced on September 5, includes significant changes to eligibility criteria, effectively canceling $75 million in Continuum of Care Build Program grants already announced by Congress. The lawsuit alleges that HUD's actions are a blatant attempt to promote a partisan and ideological agenda of the Trump administration, rather than reducing homelessness and expanding housing opportunities.

The plaintiffs claim that the new policy disqualifies projects in 36 states, plus Puerto Rico and the District of Columbia, from receiving Continuum of Care Build grants. They are seeking to block HUD's unlawful funding restrictions and restore fair access to federal housing funds for providers nationwide.

Key Takeaways:

The lawsuit, National Alliance to End Homelessness v. Turner, et al., was filed Thursday in the U.S. District Court for the District of Rhode Island against HUD and HUD Secretary Scott Turner.
The plaintiffs claim that HUD's new eligibility policy is unconstitutional and unlawful, as it prohibits applicants from being "sanctuary jurisdictions" for immigrants, providing "harm reduction" services for drug users, and having inclusive policies for transgender people.
The new policy disqualifies projects in 36 states, plus Puerto Rico and the District of Columbia, from receiving Continuum of Care Build grants.
The plaintiffs are seeking to block HUD's unlawful funding restrictions and restore fair access to federal housing funds for providers nationwide.
WDC's 14-unit project was part of a larger development to preserve 47 family units across 19 historic buildings, including some for families experiencing homelessness.
WDC was working with the Rhode Island Continuum of Care and Sojourner House on the project.
U.S. Sen. Jack Reed's office is working with Congress to reverse HUD's unjust decision and ensure HUD's Inspector General thoroughly investigates.

Statistics:

$75 million: The amount of Continuum of Care Build Program grants already announced by Congress, now effectively canceled by HUD's new policy.
36 states: The number of states that would be disqualified from receiving Continuum of Care Build grants under HUD's new policy.
Puerto Rico and the District of Columbia: The two jurisdictions also disqualified from receiving Continuum of Care Build grants under HUD's new policy.
14 units: The number of units that WDC's project would have provided for individuals escaping domestic violence.
47 family units: The number of family units that WDC's larger development would have preserved across 19 historic buildings.
19 historic buildings: The number of historic buildings that WDC's larger development would have preserved.
2025: The year in which the lawsuit was filed.

Sources:

National Alliance to End Homelessness v. Turner, et al. (Complaint)
(https://rhodeislandcurrent.com/wp-content/uploads/2025/09/National-Alliance-to-End-Homelessness-v.-Turner-et-al.-%E2%80%93-Complaint.pdf)
National Alliance to End Homelessness v. Turner, et al. (Motion for Temporary Restraining Order)
(https://www.riaclu.org/app/uploads/2025/09/NAEH-v.-Turner-%E2%80%93-Motion-for-Temporary-Restraining-Order.pdf)
Rhode Island Current
(https://rhodeislandcurrent.com/2025/09/11/lawsuit-over-federal-housing-grants-filed-in-providence-federal-court/)
ACLU of Rhode Island
(https://www.riaclu.org/)