Appeals Court Blocks Trump Bid to Redirect Fair Housing Grants

A federal appeals court in Boston refused on Monday to let the Trump administration redirect fair housing grant money away from more than 100 nonprofit organizations that have long used it to prevent and investigate housing discrimination.

The 1st US Circuit Court of Appeals largely rejected the administration's request to lift an order by US District Judge Myong Joun, who had blocked the Department of Housing and Urban Development from carrying out sweeping changes to the Fair Housing Initiatives Program. The program, created by Congress in 1987, pays multi-year grants to local groups that help enforce the Fair Housing Act.

The National Fair Housing Alliance and the Massachusetts Fair Housing Center sued in July to stop the overhaul. Joun sided with them in August. A three-judge appeals panel, made up only of appointees of Democratic presidents, said the administration had not shown it was likely to succeed in arguing that Joun went beyond his authority.

The one part the court did lift

The panel declined to put most of Joun's decision on hold while the appeal goes ahead. It agreed to lift one part only: the requirement that HUD issue new funding notices for fiscal year 2025 that would award grants under the 2024 system. Bloomberg Law reported that Chief Judge David Barron partially stayed that part of the order.

Joun had imposed that condition when the money was about to expire on September 30. The administration argued the basis for it disappeared when Congress, through a funding measure, effectively extended the expiration date to September 30, 2027.

What HUD wanted to change

In the past, HUD typically awarded more than 100 grants ranging from $75,000 to $425,000, according to lawyers for the fair housing groups. The money supports a network of organizations that assist people who say they faced housing discrimination.

In July, HUD said it would not allocate any of its congressionally appropriated funding for fiscal year 2025 to private enforcement initiatives or to multi-year grants through the program. Instead, it planned to use $46 million of the $56 million Congress had appropriated for just five grants, with $25 million of that going to a law school. The remaining $10 million could go to a state or local agency.

The administration also tried to attach unrelated conditions, requiring recipients not to use any funding to support what it called gender ideology or illegal immigration.

Joun, an appointee of former President Joe Biden, said HUD had given no reasoned explanation and had not relied on relevant data, and that the restructuring effectively barred the very organizations that had carried out the program's mission year after year since it was enacted. Fair housing groups told the court the new rules would cut funding to a majority of existing groups and force some of them to close, Bloomberg Law reported.

The Justice Department argued on appeal that the lower court orders micromanage how HUD runs a national program and stop the agency from using the discretion Congress gave it. HUD and lawyers for the plaintiffs did not immediately respond to requests for comment, Reuters reported. The case is Massachusetts Fair Housing Center v. Department of Housing and Urban Development, No. 26-2084 in the 1st Circuit.