HUD Rule Change Slashes Permanent Housing Funding Share From 90% to 30%, Triggering Multi-State Lawsuit

The Trump administration's new HUD Continuum of Care rules dramatically restructured funding allocations, cutting the share available for permanent supportive housing from 90% to 30% of grant awards. This forced providers to redirect funds toward shelters and transitional housing. Twenty states sued in federal court in Rhode Island, arguing the reallocation violated statutory requirements and would displace an estimated 170,000 people from stable housing.