Office of the
Illinois Attorney General
Kwame Raoul

Chicago – Attorney General Kwame Raoul, as part of a coalition of 20 attorneys general and two state governors, today filed a lawsuit to halt the U.S. Department of Housing and Urban Development’s (HUD) abrupt and illegal changes that will limit access to long-term housing and other services for tens of thousands of Americans experiencing homelessness or housing insecurity. 

Raoul and the coalition’s complaint challenges drastic changes to HUD’s Continuum of Care grant program that impose new, unlawful conditions on funding, while reducing the amount of grant funds that can be spent on permanent housing and project renewals. These changes will cause tens of thousands of formerly homeless individuals and families in Illinois and across the country to be evicted back into homelessness. 

“This is yet another attempt by the Trump administration to ignore congressional intent by threatening to remove critical grants that fund programs for our most vulnerable residents,” Raoul said. “Rather than continuing to support programs that keep them safe and housed, the administration has embraced policies that risk trapping people in poverty, while punishing them for being poor. In Illinois, we prioritize efforts to build affordable and permanent supportive housing and promote financial stability. I will continue to stand by my colleagues to protect these priorities in Illinois and across the country.” 

Raoul and the coalition emphasize in their complaint that HUD has a longstanding policy of encouraging a “Housing First” model that provides stable housing to individuals without preconditions. These policies have been shown to improve housing stability and public health while reducing the costs of homelessness for individuals and their communities. For decades, HUD’s Continuum of Care Program, which endorses a community-wide response to homelessness, has provided significant funding to support homeless and supportive housing services throughout Illinois. These HUD grants, which were created by Congress, have helped local and regional coalitions plan and coordinate housing and services for people experiencing homelessness. 

Previously, HUD directed approximately 90% of Continuum of Care funding to support permanent housing, but the agency’s new rule would cut that by two-thirds for grants starting in 2026. Similarly, HUD has long allowed around 90% of funding to be dedicated to project renewals and continuing projects from year to year. 

But HUD has also slashed this figure to only 30%. These new policies guarantee that tens of thousands of formerly homeless people in permanent housing nationwide will eventually be evicted through no fault of their own when the funds are not renewed. 

Additionally, HUD is planning to withhold funds from applicants that acknowledge the existence of transgender people, de-prioritize services to people with mental health issues or substance-use disorders and penalize localities with approaches to addressing homelessness that differ from the administration’s priorities. The attorneys general note in their brief that prior changes to grant conditions have been incremental to not disrupt providers’ ability to provide housing and to budget for programs well in advance. These wholesale changes are being imposed without meaningful public input or consideration of the harm and disruption they will cause. 

Service providers and community-based organizations across Illinois pair these grants with other funding sources and rely on the predictability and continuity of the grants to support the unhoused. In 2024, 19 regional Continuums of Care in Illinois that cover the entire state received more than $182 million in federal funding to support a range of programs, including permanent supportive housing, rapid rehousing, transitional housing and a broad range of services. Illinois leverages this critical federal funding and matches it with significant state funding. In the last two years, Illinois has increased state funding to address and prevent homelessness by 154%. 

Raoul and the coalition’s complaint alleges HUD violated its own regulations by not engaging in rulemaking before issuing the changes and violated the law by not receiving congressional authorization for these new conditions, many of which are directly contrary to congressionally passed statutes and HUD’s own regulations. The coalition also explains that HUD has made no effort to explain the abandonment of its own longstanding policies or consider the harmful consequences on tens of thousands of vulnerable people. Just last year, the agency explicitly encouraged grantees to implement Housing First policies and to focus on the specific needs of LGBTQ+ individuals. 

Joining Attorney General Raoul in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington and, Wisconsin, along with the governors of Kentucky and Pennsylvania.