SEATTLE—The Washington State Attorney General Nick Brown is co-leading an 18-state lawsuit against the U.S. Department of Housing and Urban Development (HUD) alleging that the agency’s new Notice of Funding Opportunity (NOFO) for Fiscal Year (FY) 2025, introduces unlawful policies and conditions that disrupt the Continuum of Care (CoC) grant program—a key federal initiative that provides billions in funding for housing and services to combat homelessness. The states are asking the court to block the new HUD policies.
“Congress designed this program in recognition that homelessness is a crisis that requires immediate stabilization and continuing support to reverse,” Brown said. “These changes are designed to trap people in poverty and then punish them for being poor.”
The lawsuit, announced during a November 25 presser, allege that the new CoC Notice of Funding Opportunity is unlawful under the Administrative Procedure Act (APA). They argue that these changes break federal laws meant to provide stable housing without strict limits or unfair conditions, HUD didn’t provide rationale to its shift from proven “Housing First” approaches, and that HUD is undermining Congress by redirecting funds with its new policies.
Changes to Continuum of Care NOFO grant that the states object to are:
- Reversal of housing First Policies and funding caps: HUD has shifted away from prioritizing “Housing First” models—which provide stable housing without preconditions like sobriety or income requirements also known as “low barrier housing”—by capping permanent housing funding at only 30% of Continuum of Care funds—down from nearly 90% for funds expiring in 2026. It also reduces “Tier 1” funding (essentially guaranteed renewal funding for existing projects) from 90% to 30% of available funds, changes the point system for grant awards to disadvantage permanent housing and services for people with mental disabilities or substance use disorders, and threatens to cancel thousands of existing projects. The lawsuit claim, this change will evict tens of thousands of formerly homeless individuals and families back into homelessness, undermining the program’s goal of providing stable, long-term housing.
- Prohibiting funding based on transgender preferences: The NOFO imposes a condition that denies funding to applicants who “acknowledge the existence of transgender and gender-diverse people,” which the states argue discriminates against LGBTQ+ individuals.
- Penalizing jurisdictions policies that do enable homelessness: The NOFO deducts points from applicants based on their location in jurisdictions that do not enforce certain administration-favored policies, such as bans on public camping. This, the states argue, penalizes areas with alternative approaches to homelessness, regardless of their effectiveness.
Washington state receives approximately $120 million in Continuum of Care grants annually, with most of it going to the five counties with the greatest need for housing services – King, Pierce, Snohomish, Spokane, and Clark counties. The remaining $25 million is distributed by the state to Washington’s other 34 counties, which are largely rural.
“Ripping away this critical funding is yet another cruel attack by the Trump administration on our most vulnerable Washingtonians,” Governor Bob Ferguson said. “This $120 million in annual funding supports data-driven programs that are proven to help stabilize people so they can have the best chance to secure permanent housing. Trump is once more playing politics with people’s most basic needs. I appreciate Attorney General Brown and his team fighting this illegal action.”
For decades, HUD has helped local and regional coalitions plan and coordinate housing and services for people experiencing homelessness through Continuum of Care grants, which were created by Congress. Providers pair these grants with other funding sources and rely on the predictability and continuity of the grants to support the unhoused.
HUD, under Secretary Eric Scott Turner and the Trump Administration, implemented the changes to the FY 2025 Continuum of Care (CoC) Notice of Funding Opportunity primarily to overhaul what they describe as failed policies from the previous Biden and Obama administrations. HUD positions these reforms as a “monumental” shift to better steward public resources to deliver outcomes, and rejecting what they call “laziness or ignorance” in prior funding practices.
According to Secretary Turner, the prior emphasis on “Housing First” models—which provide permanent housing without preconditions—was seen as ineffective, leading to a 33% increase in homelessness despite record funding levels. Instead, the changes aim to redirect funds toward transitional housing programs and initiatives that promote self-sufficiency, accountability, and “transformational results” for vulnerable populations.
In a November 14 post on X, Secretary Turner stated that Biden-era policies allocated only 1% of CoC funds to transitional housing, alleging that “Housing First” policies do not encourage personal growth or independence, effectively “warehousing” individuals without addressing root causes to that person’s homelessness.
With regards to capping Teir 1 funding to 30%, Turner stated that according to HUD research, up to 90% of “competitive” funds were automatically renewed, which indicates to him that this lacked oversight and led to potentially funding “unaccountable programs” or “slush funds.”
The new NOFO scoring criteria now prioritize CoCs and organizations that align with Trump administration policies, such as enforcing bans on public camping and avoiding acknowledgment of transgender or gender-diverse individuals in applications.
“People’s homes are not political experiments. The Trump administration’s actions undermine federal law, jeopardize the safety and stability of Washington residents, and will increase homelessness,” said Rep. Nicole Macri (D-Seattle). “I am proud to stand with Attorney General Nick Brown to stop this unlawful and deeply harmful federal policy shift – one that puts thousands of Washingtonians at risk of losing their homes.”
Author: Mario Lotmore
