Attorney General Bonta Secures Important Victory in Lawsuit Challenging HUD Funding Restrictions After Trump Administration Drops Appeal

OAKLAND— California Attorney General Rob Bonta today issued the following statement after the Trump Administration dropped its appeal of a court decision upholding a preliminary injunction that blocked funding restrictions the U.S. Department of Housing and Urban Development (HUD) attempted to place on its Continuum of Care (CoC) grant program. CoC is the federal government’s flagship program for funding affordable housing and other services for individuals at risk of and experiencing homelessness. As part of a coalition of 19 attorneys general and two governors, Attorney General Bonta sued the Trump Administration in November 2025 over the planned funding restrictions and secured a preliminary injunction from the U.S. District Court for the District of Rhode Island blocking those changes. In February 2026, the Trump Administration filed a motion to dissolve the preliminary injunction, which the District Court denied. The Trump Administration appealed the ruling to the U.S. Court of Appeals for the First Circuit, which earlier this month, rejected HUD’s request to temporarily allow the restrictions to go into effect.

“We continue to fight for Californians and the rule of law, and we continue to win. HUD’s unlawful funding restrictions have been rejected by the courts, and because the Trump Administration has now dropped its appeal, our preliminary injunction remains in effect while the case proceeds to summary judgment,” said Attorney General Bonta.“People experiencing housing insecurity or homelessness need the federal government’s continued support — not a rollback of assistance. We will continue to closely monitor the Administration’s actions, seek accountability when the law is not followed, and litigate this case to the very end.”

Among other things, HUD has tried to dramatically reduce the amount of grant funds that could be spent on permanent housing and to penalize housing providers for recognizing gender identity and diversity. HUD has also attempted to disadvantage programs that address mental disabilities and substance use disorders. These conditions went against the explicit intent of Congress and HUD’s previous guidance.