Court decision on CoC NOFO litigation

Dear CoC Colleagues,

Today, a federal judge ruled that HUD’s FY2026 CoC Notice of Funding Opportunity (NOFO) is invalid because HUD did not follow the public process required by law before making significant changes to the competition. The court did not rule on whether those policy changes themselves are lawful, only that HUD used the wrong process to implement them. The central basis for this ruling is that HUD’s $1.2 billion set-aside would compel communities to shift funding away from permanent supportive housing and rapid rehousing towards transitional housing and supportive services only projects. The ruling does not weigh in on the other challenged provisions

What this means right now:

• The FY2026 CoC NOFO has been invalidated in its entirety by the court.
• HUD may appeal the decision or issue a new NOFO after taking additional procedural steps.
• At this time, HUD has not announced how it will respond.

It appears very unlikely that the current August 26th application deadline will remain in place. HUD has not issued any official guidance, and we do not yet know what the revised competition process or timeline will be.

We recognize that many of you have invested significant time preparing applications and retooling your projects, and we understand the uncertainty this creates. We appreciate your efforts and partnership as we continue to navigate these challenges together. Today’s court decision also creates an opportunity for Congress to enforce the deadline they imposed to make 2026 grant awards by 12/1/26 and provide HUD with additional deadlines for renewing grants non-competitively as happened with the FY2025 awards.

We are monitoring developments closely and will share information as it emerges. Until then, we recommend pausing work on your applications while retaining the work you have already completed.

Thank you for your patience as this situation continues to evolve.

Sincerely,

CT BOS Team