Michigan Attorney General Dana Nessel secured a federal appeals court ruling rejecting the Trump administration’s request to impose harmful restrictions on grant funding that would have left thousands across the country without a place to live. Nessel and a multistate coalition sued the U.S. Department of Housing and Urban Development (HUD) last November after HUD abruptly changed and placed unlawful conditions on its Continuum of Care program, the largest resource for federal homelessness assistance funding, to dramatically reduce the amount of grant funds that can be spent on permanent housing.
U.S. District Court Judge Mary McElroy sided with the states in December, saying HUD’s actions would cause irreparable harm to the plaintiffs, and issued a preliminary injunction barring HUD from implementing the unlawful restrictions. On April 1, the appeals court rejected HUD’s request to temporarily allow the restrictions to go into effect.
“While the federal government felt comfortable gambling with the lives of thousands of Americans by forcing them onto the street, I am relieved that the Court has once again upheld the rule of law,” said Attorney General Nessel. “I will continue to defend vulnerable Michiganders from heartless, unlawful conditions that weaponize federal funding and pull the rug out from under them.”
The appeals court said Nessel and the coalition had provided ample evidence that if HUD moved ahead with its planned restrictions to the funding, the results would be “immediately destabilizing and disastrous for their constituents.”
Last year, Michigan received more than $100 million through the Continuum of Care grant program. The illegal terms listed in the 2025 notice of funding
opportunity would have adversely impacted Michigan residents – putting an estimated 7,000 total households, including approximately 2,000 families with children, at risk of losing their housing.
U.S. District Court Judge Mary McElroy sided with the states in December, saying HUD’s actions would cause irreparable harm to the plaintiffs, and issued a preliminary injunction barring HUD from implementing the unlawful restrictions. On April 1, the appeals court rejected HUD’s request to temporarily allow the restrictions to go into effect.
“While the federal government felt comfortable gambling with the lives of thousands of Americans by forcing them onto the street, I am relieved that the Court has once again upheld the rule of law,” said Attorney General Nessel. “I will continue to defend vulnerable Michiganders from heartless, unlawful conditions that weaponize federal funding and pull the rug out from under them.”
The appeals court said Nessel and the coalition had provided ample evidence that if HUD moved ahead with its planned restrictions to the funding, the results would be “immediately destabilizing and disastrous for their constituents.”
Last year, Michigan received more than $100 million through the Continuum of Care grant program. The illegal terms listed in the 2025 notice of funding
opportunity would have adversely impacted Michigan residents – putting an estimated 7,000 total households, including approximately 2,000 families with children, at risk of losing their housing.
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