Office of the
Illinois Attorney General
Kwame Raoul

Court Decision Prevents Trump Administration’s Illegal Conditions from Jeopardizing Funding for Continuum of Care Programs

Chicago – Attorney General Kwame Raoul and a coalition of 18 other attorneys general and the governors of Kentucky and Pennsylvania won their case challenging the Trump administration’s illegal conditions on billions of dollars in funding that community organizations across the country rely on to provide housing and services for families and individuals experiencing homelessness.

In November 2025, Attorney General Raoul joined the coalition in filing a lawsuit against the Trump administration to protect more than $3 billion in Continuum of Care grant funds that were jeopardized by illegal new conditions imposed by the Department of Housing and Urban Development (HUD). These funds support vital resources for those most at risk of homelessness, such as veterans and individuals with chronic health conditions and disabilities. The U.S. District Court for the District of Rhode Island on Monday granted critical parts of the coalition’s motion for summary judgment, ruling that HUD’s conditions restricting Continuum of Care funding are unlawful and cannot be implemented.

“Instead of supporting Americans experiencing homelessness, the administration instead attempted to cut off critical funding for services and programs that ensure our most vulnerable Illinois residents have stable housing,” Raoul said. “I am pleased with the court’s ruling, and I will continue to stand with my colleagues to protect the rule of law in Illinois and across the country.”  

In November 2025, HUD issued a new grant application imposing illegal conditions on Continuum of Care grants that threatened funding community organizations across Illinois receive to provide housing and other support for those experiencing homelessness. The administration imposed a cap on funds that can support permanent supportive housing. If enacted, this cap would have slashed grant funds for permanent supportive housing by two-thirds and put n estimated 170,000 people across the U.S., and 7,500 people in Illinois alone, at risk of losing their housing and returning to homelessness.

HUD also imposed other conditions, barring Continuum of Care funds from organizations that acknowledge the existence of transgender or nonbinary individuals and excluding programs that provide services for mental health disabilities. Attorney General Raoul and the coalition argued in their lawsuit that these conditions violate the Administrative Procedure Act and Congress’ constitutional power to control spending. 

In a decision on Attorney General Raoul and the coalition’s motion for summary judgment, the court ruled that the conditions on Continuum of Care funding that HUD implemented in its 2025 Notice of Funding Opportunity (NOFO) violate the Administrative Procedure Act and cannot be implemented.

In 2024, 19 regional continuums of care in Illinois received more than $182 million in federal funding to support programs to address homelessness across the state, 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%. 

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