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New Jersey, along with more than 20 states and the District of Columbia, sued the U.S. Department of Housing and Urban Development (HUD) on Tuesday, claiming new federal funding rules threaten to displace tens of thousands of formerly homeless Americans from stable housing.
The lawsuit, filed in the U.S. District Court for the District of Rhode Island, targets HUD’s fiscal year 2026 funding guidelines for the Continuum of Care Program, the federal government’s primary funding source for homeless services. The District of Columbia, New York and Rhode Island lead the coalition challenging what they characterize as an unlawful cap on permanent housing funds and mandatory service requirements for residents.
