As part of a coalition of 21 attorneys general and two governors, California Attorney General Rob Bonta filed a lawsuit challenging the U.S. Department of Housing and Urban Development’s (HUD) Notice of Funding Opportunity (NOFO) for the Continuum of Care (CoC) Program. CoC is the federal government’s flagship program for funding affordable housing and other services for individuals at risk of and experiencing homelessness. The coalition alleges that HUD’s 2026 CoC NOFO seeks to steer funding away from permanent supportive housing projects, despite a federal court order issued last week blocking HUD’s 2025 CoC NOFO, which sought to divert more than $3 billion in federal funding from those projects. Congress has also acted to protect renewal funding for those projects.

“The Trump Administration is once again trying to undermine HUD’s longstanding Housing First approach that has kept and continues to keep our most vulnerable residents housed,” said Attorney General Bonta. “Congress and the courts have made clear that funding for permanent supportive housing must be protected. We will continue fighting to ensure that those who have secured housing stability do not lose it.”

Permanent supportive housing provides long-term housing stability, transitional housing provides temporary shelter intended as a bridge to permanent housing, and supportive service-only projects provide services without housing assistance. In the complaint, which was filed in the U.S. District Court for the District of Rhode Island, the coalition argues that:

• HUD’s 2026 CoC NOFO illegally attempts to limit funding for permanent housing by setting aside approximately $1.3 billion for transitional housing and supportive service-only projects. The set-aside would effectively cap permanent housing funding below levels necessary to maintain existing projects. The National Alliance to End Homelessness estimates this could put at least 97,000 residents of CoC-funded permanent housing at risk of losing their housing.
• New scoring criteria in HUD’s 2026 CoC NOFO unlawfully penalizes applicants for continuing to follow HUD’s longstanding Housing First approach by steering funding away from proven low-barrier housing that helps people exit homelessness and toward programs that impose conditions before individuals can access housing.
• These new policies fundamentally undermine CoC’s goal of ensuring that individuals and families who have exited homelessness are not forced back onto the streets, as well as Congress’s directive that HUD prioritize renewal funding to support that same objective.

In filing the complaint, Attorney General Bonta joins the attorneys general of Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Massachusetts, Maryland, Maine, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.