A coalition of 20 states and the District of Columbia filed a lawsuit Tuesday challenging the Department of Housing and Urban Development’s (HUD) restructuring of the $3.6 billion Continuum of Care program (COC), arguing the changes violate federal law and constitutional separation of powers principles.

The federal lawsuit, filed in the U.S. District Court for the District of Rhode Island, targets HUD’s November Notice of Funding Opportunity (NFO) for the fiscal year 2025, which reduces the share of renewal funds for permanent housing to 30 percent of the Annual Renewal Demand , down from the approximately 87 percent of current funds supporting permanent housing. The new NFO also imposes conditions requiring grant recipients to certify they do not “rely on or otherwise use a defin

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