Litigation over HUD's FY2026 Continuum of Care NOFO and its $1.3 billion set-aside, from the district court's August vacatur through the First Circuit's stay, vacatur of that judgment, and remand.
Mid-Willamette Valley Community Action executive director Jimmy Jones said the federal shift away from Housing First in Continuum of Care funding criteria could displace 4,000 to 5,000 Oregonians back into homelessness; KATU reported his agency is among those still applying for the funds. Multnomah County said in a statement that up to a few hundred people could lose federally supported housing under the shift toward transitional housing with service requirements, and that it had submitted an application with the goal of keeping everyone currently housed in place. The White House said the change holds grantees “to higher standards of effectiveness in reducing homelessness and increasing public safety.”
Oregon joined 20 other states in suing HUD over the CoC changes on November 25, 2025; at that time Jones estimated 2,500 to 3,000 Oregonians could lose housing.
Continuums of Care submitted FY2026 applications against the reinstated September 30 deadline, with NAHRO’s general counsel saying applicants did not know what they would receive under the new program rules. NAHRO said HUD’s proposed 30% cap on permanent supportive housing could affect as many as 97,000 households, and Community Solutions estimated up to $1.8 billion in annual rental payments at risk. NAHRO also said that of roughly 6,400 FY2024 renewal grants Congress required HUD to fund, only about 5,300 had been fully executed.
HUD’s competition page states it has extended the September 30 application deadline to October 14, 2026 for CA-600 (Los Angeles) applications only, and that comments on a Federal Register notice on proposed activities are due October 13.
National Network for Youth · on the First Circuit's vacatur and remand of the CoC NOFO ruling
The First Circuit on September 24 vacated the Rhode Island district court's August 7 judgment that had set aside HUD's FY2026 Continuum of Care NOFO and remanded both appeals for further proceedings after the plaintiffs withdrew the notice-and-comment claim on which the district court had ruled; the mandate issued September 28. NN4Y reported that the NOFO, which provides $4.04 billion and includes a $1.3 billion set-aside for transitional housing and supportive-services-only projects, remains in effect as written, with applications due September 30 at 8:00 PM ET, and that the district court can now rule on the plaintiffs' remaining claims, including the threshold criteria and the law-enforcement-policy requirement. HUD's competition page states the department must make awards by December 1, 2026, and that CA-600 (Los Angeles) applications have a separate October 14 deadline.
The First Circuit's September 16 stay order found HUD “has made a strong showing that it is likely to succeed on the merits” of its argument that the set-aside is not a “bonus or other incentive” under 42 U.S.C. § 11386b(d).
National Alliance to End Homelessness · on the Alliance's emergency First Circuit motion against the reopened CoC NOFO
The National Alliance to End Homelessness said it filed an emergency motion asking the First Circuit to vacate the Rhode Island district court's ruling and remand the case so the district court can rule on the plaintiffs' remaining claims, or alternatively to expedite the appeal, with the stated aim of stopping the FY2026 Continuum of Care funding notice before HUD makes awards under it. The August district court ruling held that HUD could not incentivize transitional housing or supportive-services-only projects through a $1.3 billion set-aside without notice and comment. HUD reopened the NOFO with a September 30 deadline after the First Circuit allowed the competition to proceed during the appeal.
The First Circuit ruled September 16 that HUD could move forward with the FY2026 CoC NOFO while its appeal of the vacatur proceeds.
HUD reopened the FY2026 Continuum of Care Program Competition NOFO on September 18, after the First Circuit stayed the district court order that had vacated it, and set a new federal application deadline of September 30, 2026, at 5:00 p.m. PT. The NOFO is otherwise unchanged except for a technical correction reducing the required project applicant notification period from 15 days to 7 days.
The competition makes available $4.04 billion, with a $1.3 billion set-aside for new projects prioritizing transitional housing, per HUD's June 1 announcement of the original NOFO.
A three-judge panel of the First Circuit stayed U.S. District Judge Mary McElroy's ruling that had barred HUD from setting aside $1.3 billion of the roughly $4 billion FY2026 Continuum of Care appropriation for transitional housing and supportive-service-only grants. The panel said the administration was likely to succeed in establishing that the set-aside was not subject to notice-and-comment requirements, and that HUD would suffer irreparable injury absent a stay because it must make awards by December 1, 2026. McElroy's vacatur had come in suits brought by 22 states, the District of Columbia, and a coalition of homelessness and housing groups.
McElroy set aside the FY2026 CoC NOFO in its entirety on August 7 for lack of notice and comment; the appeal is First Circuit case 26-1923.
NACo reported that HUD's September 11 Federal Register notice seeking comment on Continuum of Care bonus incentives — for transitional housing, supportive-services-only projects, sober homes, and law-enforcement coordination — is likely a precursor to revising and re-issuing the vacated FY2026 CoC NOFO once notice-and-comment requirements are satisfied. Comments are due October 13, and NACo said it will submit comments and draft a template for counties. The vacated NOFO had directed funding toward transitional housing and supportive services through a $1.3 billion set-aside.
The U.S. District Court for the District of Rhode Island set aside the FY2026 CoC NOFO in its entirety on August 7, 2026, for lack of notice and comment; HUD's appeal and emergency stay motion are pending at the First Circuit.
U.S. District Court, D.R.I., via CourtListener · on plaintiffs' unopposed motion to correct the FY2026 CoC NOFO judgment
Plaintiffs in NAEH v. HUD filed an unopposed motion September 4 asking the district court to recast its August 7 judgment setting aside HUD's FY2026 Continuum of Care NOFO as a Rule 54(b) partial judgment, and then to resolve their still-pending claims against OMB, which challenge two footnotes OMB attached when it apportioned approximately $4 billion in FY2026 CoC funds on May 22. Because HUD's appeal is pending, plaintiffs seek an indicative ruling first; responses are due September 18.
In the First Circuit appeal (26-1923), HUD's emergency stay motion remained pending as of the appellate docket's September 9 update, after the panel ordered supplemental briefing that concluded September 2.
Federal Register (HUD) · on HUD's proposed Continuum of Care program incentive categories
HUD filed a 54-page notice for public inspection September 10 seeking comment on activities it proposes to incent through the Continuum of Care program, with comments due 30 days after its scheduled September 11 publication. The notice names five activity categories, including transitional housing with employment- and behavioral-health-focused services, supportive service participation agreements, drug-free and sober housing, and coordination with law enforcement and first responders. The notice states that as of 2023 a median of 6 percent of individuals in CoC-funded housing nationally increased their earned employment income during the reporting period.
On August 27 the First Circuit ordered the parties in NAEH v. HUD (26-1923) to brief what "bonuses or other incentives" means under 42 U.S.C. § 11386b(d)(1); HUD's stay motion in that appeal remains pending.
CourtListener · on HUD's pending stay motion in the CoC NOFO vacatur appeal
Appellees — including NAEH, NLIHC, Boston, Cambridge, Tucson, Santa Clara County, King County, and Nashville — filed their supplemental response September 2 to the First Circuit panel's questions on HUD's set-aside authority under 42 U.S.C. § 11382(a) and the meaning of "bonuses or other incentives" in § 11386b(d)(1). HUD filed its supplemental memorandum August 31, and under the panel's schedule its supplemental reply is due by 5 p.m. today, September 4. As of the docket's September 3 update, the panel had not ruled on HUD's emergency motion to stay the vacatur of the FY2026 Continuum of Care funding notice.
The District of Rhode Island vacated the FY2026 CoC funding notice on August 7; the panel's August 27 order set the supplemental briefing schedule that ends with today's reply.
CourtListener · on First Circuit supplemental-briefing order on HUD's motion to stay the CoC NOFO vacatur
A three-judge First Circuit panel (Montecalvo, Aframe, and Dunlap) ordered supplemental briefing on HUD's emergency motion to stay the vacatur of the FY2026 Continuum of Care funding notice pending appeal, directing the parties to address whether 42 U.S.C. § 11382(a) gives the Secretary discretion to set aside Continuum of Care funds so long as congressionally mandated set-asides under § 11386b(a) and (b) are met, and what "bonuses or other incentives" means in § 11386b(d)(1). The order set appellants' supplemental memorandum for August 31 at 5 p.m., appellees' response within two days thereafter (September 2), and any reply within two days after that.
The District of Rhode Island vacated the FY2026 CoC funding notice on August 7, and briefing on the stay motion itself closed August 24 with HUD's reply.
City Bureau reported that Chicago stands to lose almost $67 million in federal Continuum of Care funding and 5,892 of its more than 9,000 permanent supportive housing beds if proposed federal cuts are enacted, and that Illinois as a whole would lose $106 million and 9,362 of 21,400 beds. The Trump administration tried in November to impose a 30% cap on Continuum of Care money used for permanent housing programs. Federal COVID-19 relief money that supports local services must be spent by the end of 2026, with no plans to replace it, the outlet reported.
The FY2026 CoC funding notice carrying HUD's new conditions was vacated by a federal court on August 7; HUD has appealed and moved for a stay pending appeal.
CourtListener · on First Circuit supplemental-briefing order on HUD's emergency stay motion
With HUD's emergency stay motion fully briefed since August 24, a three-judge First Circuit panel — Judges Montecalvo, Aframe and Dunlap — on August 27 ordered both sides to file supplemental memoranda on two statutory questions: whether 42 U.S.C. § 11382(a) gives the Secretary discretion to set aside Continuum of Care funds beyond the congressionally mandated set-asides in § 11386b(a) and (b), and what "bonuses or other incentives" means in § 11386b(d)(1). HUD's memorandum is due August 31 by 5:00 p.m., with the appellees' response due within two days and any reply two days after that.
The court's August 17 briefing order had stated it "intends to rule promptly on the matter," and the stay motion was fully briefed as of HUD's August 24 reply.
U.S. Court of Appeals, First Circuit via CourtListener · on HUD's reply brief completing First Circuit stay briefing in the CoC NOFO appeal
HUD, Secretary Scott Turner, OMB, and Director Russell Vought filed their reply in support of the emergency motion for a stay pending appeal on August 24, docketed at 1:28 p.m., ahead of the court's 5:00 p.m. deadline; the filing completed the briefing schedule the First Circuit set on August 17, under which the ten appellees responded August 21. The court, which said it intends to rule promptly, had not ruled as of the docket's last update Monday evening.
The appeal challenges the District of Rhode Island's August 7 judgment vacating HUD's FY2026 Continuum of Care NOFO; the district court denied the same stay request on August 13.
Continuum of Care grant funding for the Cincinnati region, due July 1, arrived about a month and a half late, and gap-funding contracts Cincinnati and Hamilton County had prepared were not executed. Strategies to End Homelessness president Kevin Finn said organizations covered July and August costs from other sources and the HUD funding will pay for services through the program year ending June 30, 2027; he said HUD has not released information about the next round of CoC funding, whose applications would typically be due in August or September.
The vacated FY2026 NOFO would have capped permanent supportive housing at 30% of CoC spending; the Cincinnati-area continuum spends about 95% of its current funding on permanent supportive housing.
U.S. Court of Appeals, First Circuit via CourtListener · on the appellees' response to HUD's emergency stay motion in the CoC NOFO appeal
The ten appellees — including the National Alliance to End Homelessness, NLIHC, Boston, Santa Clara County, and Tucson — filed their response to HUD's emergency motion for a stay pending appeal on August 21 at 4:28 p.m., meeting the court's 5:00 p.m. deadline. HUD's reply is due by 5:00 p.m. today, August 24, and the court's August 17 order said it "intends to rule promptly on the matter"; no ruling appears on the docket as of its August 22 update.
The district court denied the same stay request on August 13, holding HUD had not presented "a new, previously-unrejected basis on which they will likely succeed on the merits."
U.S. Court of Appeals, First Circuit via CourtListener · on First Circuit expedited briefing on HUD's emergency stay motion in the CoC NOFO case
HUD filed an emergency motion for stay pending appeal directly in the First Circuit on August 14, one day after the district court denied its emergency stay of the August 7 order vacating the FY2026 Continuum of Care NOFO. On August 17 the First Circuit ordered plaintiffs-appellees to respond by 5:00 p.m. August 21 and HUD to reply by 5:00 p.m. August 24, and said it intends to rule promptly.
HUD's CoC competition page states the 2026 NOFO and its August 26 application deadline are no longer in force and that HUD is unable to accept applications.
Homeless Action Network of Detroit · on Detroit CoC's suspension of FY2026 grant work after the NOFO vacatur
The Homeless Action Network of Detroit, the city's Continuum of Care collaborative applicant, suspended all work on its FY2026 HUD application after the August 7 federal ruling vacating the FY2026 NOFO, and told project applicants to stop entering projects into eSNAPS. The CoC Board had voted August 10 on new CoC Bonus and DV Bonus projects and its Project Priority Ranking list, which HAND is now publishing "for information only."
HUD announced on May 21, 2026 that all current CoC projects, including Detroit's, were awarded FY2025 funds non-competitively.
U.S. District Court, D.R.I. via CourtListener · on HUD's appeal of the CoC NOFO vacatur and denial of its emergency stay
HUD, Secretary Scott Turner, OMB, and Director Russell Vought filed a notice of appeal on August 13 from the August 7 order that set aside the FY2026 Continuum of Care NOFO, and moved for an emergency stay of the judgment pending appeal, requesting relief by August 17. Judge Mary S. McElroy denied the stay the same day, writing that the defendants failed to present a new basis on which they would likely succeed on the merits. The First Circuit assigned the appeal case number 26-1923 on August 14.
The vacated NOFO's original application deadline was August 26, 2026; responses to the stay motion in the district court were due August 27.
NH&RA · on HUD's posted guidance canceling the August 26 CoC application deadline
HUD posted guidance on its CoC Program Competition page stating the 2026 NOFO and its August 26, 2026 application deadline "are no longer in force" and that it is unable to accept applications at this time. HUD said further guidance and updates will come via the SNAPS Competition Listserv and HUD.gov; NH&RA noted the same judge previously ruled against HUD's FY2025 NOFO changes, a ruling HUD unsuccessfully appealed.
The FY2026 NOFO was vacated by a federal judge in Rhode Island on August 7.