Dear Colleagues:

As many of you are aware, litigation challenging HUD’s changes to the FY2025 Continuum of Care (CoC) Program Notice of Funding Opportunity (NOFO) has been ongoing in the U.S. District Court for the District of Rhode Island. On June 29, 2026, the Court issued a summary judgment decision that sets aside HUD’s November 2025 and December 2025 NOFOs.

Importantly, this decision does not change the current FY2026 CoC Competition schedule. The FY2026 CoC Competition remains open, and the existing competition deadlines remain in effect. CT BOS will continue moving forward with the competition based on HUD’s published FY2026 NOFO and all current HUD guidance unless and until HUD or the Court provides further direction. At this time, applicants should continue preparing applications according to the established timeline. We will alert you when project applications are available in eSnaps.

The court concluded that HUD’s FY2025 NOFO violated the Administrative Procedure Act by making significant changes to CoC funding priorities without adequately considering the impacts of those changes or providing a reasoned explanation for its policy shift. The Court also held that HUD exceeded its statutory authority by failing to issue the 2025 NOFOs within the deadline established by law.

The Court declined to issue a permanent injunction prohibiting HUD from adopting similar policies in future NOFOs, finding that such relief was premature because any future action by HUD remained speculative.The court did not rule on the legality of any individual FY2025 or FY2026 NOFO policy—such as:

• capping renewal permanent housing funding,
• reducing emphasis on permanent housing,
• discontinuing or de-emphasizing evidence-based practices,(e.g., Housing First)

The opinion repeatedly notes that federal agencies are generally free to change policy, even dramatically, provided they do so through lawful administrative procedures and provide a reasoned explanation for the change. The court expressly stated that HUD may “alter its approach, identify new goals, and award funds in support of achieving them,” but only after complying with applicable statutory and procedural requirements.

We recognize that this litigation creates uncertainty regarding the longer-term implementation of HUD’s policy changes. The Court’s decision addresses only the earlier FY2025 NOFOs and specifically noted that any challenge to the FY2026 NOFO would need to proceed through a separate legal action. We will continue to monitor developments closely and promptly communicate any changes that could affect the FY2026 competition.

Thank you for your continued work and partnership throughout this year’s competition. Please do not hesitate to reach out with any questions.

Sincerely,

CT BOS Team