Update on New Lawsuit Challenging

FY2026 CoC NOFO

Dear CoC Stakeholders:

We wanted to make you aware of a new lawsuit that was filed yesterday, in the U.S. District Court for the District of Rhode Island challenging HUD’s FY2026 Continuum of Care (CoC) Program Notice of Funding Opportunity (NOFO). The complaint was filed by a coalition of 23 states and the District of Columbia, including Connecticut, against HUD and the HUD Secretary.

The lawsuit challenges several aspects of the FY2026 NOFO, including:

• The NOFO’s approximately $1.3 billion funding set-aside for new Transitional Housing and Supportive Services Only projects, which the plaintiffs argue functions as an unlawful cap on funding available for permanent housing renewal projects.
• New scoring criteria that reward Continuums for requiring participation in certain supportive services and substance use treatment as a condition of continued program participation, which plaintiffs contend conflicts with the statutory framework and HUD’s longstanding Housing First policies.
• HUD’s authority to implement these policy changes through the NOFO rather than through notice-and-comment rulemaking.

The plaintiffs are asking the court to declare these provisions unlawful, vacate the challenged portions of the FY2026 NOFO, and issue preliminary and permanent injunctions preventing HUD from implementing them. The complaint follows the court’s recent decision vacating HUD’s FY2025 CoC NOFO, and the states argue that HUD has again adopted policies that conflict with the McKinney-Vento Act and the Administrative Procedure Act.

At this stage, however, the filing of a lawsuit does not change the requirements of the FY2026 competition. The FY2026 NOFO remains in effect, and the competition deadline remains August 26, 2026. Unless HUD withdraws or amends the NOFO, or the court issues an order blocking implementation of some or all of its provisions, we must continue preparing applications in accordance with the published NOFO requirements.

We will continue monitoring court filings and any guidance issued by HUD. If developments occur that affect the competition or require changes to application strategies, we will communicate those updates promptly. At this time, e-snaps is not open for project applications. We will continue to monitor that as well and provide updates as they are available.

Please contact us if you have questions.

Sincerely,

CT BOS Team