Scaffolding covers the facade of the federal courthouse for the District of Rhode Island, as seen from Kennedy Plaza in Providence, on Sept. 9, 2025. (Photo by Alexander Castro/Rhode Island Current)
A Rhode Island federal judge Friday granted a temporary restraining order blocking the U.S. Department of Housing and Urban Development (HUD) from awarding grants to applicants responding by a one-week deadline to a drastically revised notice for funding to build housing for people experiencing chronic homelessness.
HUD’s new notice issued Sept. 5 superseded a funding notice issued in May and served as yet another example of chaos unleashed by the Trump administration on the courts, U.S. District Judge Mary S. McElroy said at the Zoom hearing. The deadline for applications was 3 p.m. Friday, a half hour before the hearing began.
“It’s unfortunate that we are here on these things that are done so last minute by these agencies, but here we are,” McElroy told attorneys representing the plaintiffs in a case filed Thursday by attorneys for National Alliance to End Homelessness and Providence based Women’s Development Corporation (WDC).
The plaintiffs are suing HUD and HUD Secretary Scott Turner over new eligibility criteria for applications for $75 million in Continuum of Care Build grants. They claim the new rules are unconstitutional and unlawful because applicants are prohibited from being so-called “sanctuary jurisdictions” for immigrants, providing “harm reduction” services for drug users and having inclusive policies for transgender people. The revised grant funding notice indicated that grants would be awarded on a first-come, first-served basis.
The case, National Alliance to End Homelessness v. Turner, et al., asks the court to block HUD’s unlawful funding restrictions and restore fair access to federal housing funds for providers nationwide. The lawsuit claims projects in 36 states plus Puerto Rico and the District of Columbia are now ineligible for Continuum of Care Build grants under the Trump administration’s criteria.
Kristin Bateman, senior counsel with Democracy Forward, lead counsel for the plaintiffs, argued that the abrupt reissue of the funding notice violated the HUD Reform Act, which requires new funding opportunities to be issued with 30 days notice.
“Here there was a seven-day turnaround with no justification,” Bateman said.
Joshua Schopf, a trial attorney for the Department of Justice’s civil division, argued that the HUD secretary had 30 days to publish his reasons for waiving the standard notice with a federal register.
“This happened Sept. 5… he has until Oct. 6 to publish his reasons,” he said. “We haven’t violated procedure because it’s still ongoing.”
Bateman also took aim at the revised eligibility criteria that prohibit applicants from having policies supporting transgender people, which she said conflicts with existing federal law barring discrimination against non-cisgendered people.
“There’s no way someone could comply with those federal laws and this eligibility criteria treating sex as a binary thing,” she said.
“We’re not going to defend that particular condition,” Schopf told McElroy.
WDC had been informed in August by the office of U.S. Sen. Jack Reed that it would receive a $7 million Continuum of Care Build grant for a project to build 14 units for individuals escaping domestic violence in five new buildings in Providence’s West End. It had applied for the funding in May. But the nonprofit developer said it would be ineligible to apply for the new notice issued Sept. 5 since it has no control over the city or state’s stance on immigration and other policies nor could it reapply with only a one-week turnaround.
“The new conditions, if they’re precedent, you could argue that nobody in Rhode Island would be eligible if this applies to other grants,” WDC Executive Director Frank Shea told Rhode Island Current Friday afternoon.
Shea said he was pleased the court issued the restraining order and that the grant fund won’t go elsewhere for the time being.
“That was the fear, it would be hard to undo,” he said.
During the hearing, McElroy said she was convinced that HUD’s new grant eligibility criteria caused irreparable harm.
“The irreparable harm is that these funds would be lost forever by anybody that intends to apply,” McElroy said.
“The court’s decision provides significant relief for communities in vulnerable circumstances and for the principle that federal housing funds exist to serve people in need, not to advance partisan goals,” said Skye Perryman, president and CEO of Democracy Forward, in a statement issued Friday just as the 54-minute hearing concluded. “The administration cannot unlawfully weaponize essential housing resources. We are proud to fight alongside our clients and partners as the case continues.”
The Trump administration now has 14 days to ask for a preliminary injunction. McElroy also tasked the DOJ with a briefing schedule and suggested hearings could be held in person in Providence instead of virtually if Shopf would like.
“Rhode Island’s lovely in the fall, not so much in February when it rains constantly,” she said.
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