On Friday, a federal judge ruled that HUD’s FY2026 CoC Notice of Funding Opportunity (NOFO) is invalid because HUD did not follow the public process required by law before making significant changes to the competition. The court did not rule on whether those policy changes themselves are lawful, only that HUD used the wrong process to implement them. The central basis for this ruling is that HUD’s $1.2 billion set-aside would compel communities to shift funding away from permanent supportive housing and rapid rehousing towards transitional housing and supportive services only projects. The ruling does not weigh in on the other challenged provisions.
What this means right now:
- The FY2026 CoC NOFO has been invalidated in its entirety by the court.
- HUD may appeal the decision or issue a new NOFO after taking additional procedural steps.
- At this time, HUD has not announced how it will respond.
It appears very unlikely that the current August 26th application deadline will remain in place. HUD has not issued any official guidance, and we do not yet know what the revised competition process or timeline will be.
We are monitoring developments closely and will share information as it emerges. Until then, we recommend pausing work on your applications while retaining the work you have already completed.