Federal appeals court blocks HUD plan to overhaul $4 billion permanent supportive housing program

A federal appeals court upholds a preliminary injunction on April 1, 2026, blocking HUD Secretary Scott Turner from overhauling the $4 billion annual Continuum of Care permanent supportive housing program. Turner sought to shift the program from the Housing First model to transitional housing requiring sobriety, mental health treatment, and employment participation. The court says implementing the changes "would be immediately destabilizing and disastrous," threatening to push approximately 170,000 disabled, elderly, and veteran residents back into homelessness. Congress appropriated the funds for permanent supportive housing; HUD sought to redirect them through administrative action rather than new legislation. Homeless service providers had already stopped accepting new clients due to funding uncertainty.