On October 19, 2026, the First Circuit U.S. Court of Appeals largely upheld an order blocking the Trump administration's overhaul of HUD's $56 million fair housing grant program. The proposed overhaul sought to redirect $46 million away from over 100 traditional non-profits to just five recipients while restricting funding over gender ideology and illegal immigration. The appeals court left the block in place but lifted an order requiring HUD to issue 2025 funding rules after Congress extended funding to September 2027.
Appeals court rulings on the overhaul
- ▪The U.S. Court of Appeals for the First Circuit largely rejected the Trump administration's request to pause a lower court order blocking HUD's fair housing grant overhaul on October 19, 2026.
- ▪A three-judge First Circuit panel composed of Democratic presidential appointees ruled that the Trump administration failed to show it was likely to succeed on appeal regarding Judge Myong Joun's injunction.
- ▪First Circuit Chief Appellate Judge David Barron partially stayed a lower court order, lifting a requirement that HUD issue fiscal year 2025 fair housing funding notices under 2024 grant conditions.
District court injunction against HUD
- ▪U.S. District Judge Myong Joun ruled that HUD failed to provide a reasoned explanation or rely on relevant data when restructuring the Fair Housing Initiatives Program.
- ▪U.S. District Judge Myong Joun in Boston blocked HUD's fair housing grant overhaul in August 2026 following a July 2026 lawsuit filed by the National Fair Housing Alliance and Massachusetts Fair Housing Center.
Government legal arguments
- ▪The Trump administration contended on appeal that U.S. District Judge Myong Joun lacked any legal basis to dictate how HUD disburses fair housing grant funds.
- ▪The U.S. Department of Justice argued on behalf of the Trump administration that judicial orders blocking HUD's fair housing grant overhaul improperly micromanage national program administration and restrict executive discretion.
Changes under HUD's proposed overhaul
- ▪In July 2026, HUD announced it would allocate no fiscal year 2025 Fair Housing Initiatives Program funding to private enforcement initiatives or multi-year grants.
- ▪HUD's proposed overhaul planned to direct $46 million of $56 million in congressionally appropriated fair housing funds into five specific grants, including $25 million for a law school.
- ▪The Trump administration sought to require fair housing grant recipients to sign conditions agreeing not to use funding to support gender ideology or illegal immigration.
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