Appeals court leaves in place ruling that blocked HUD's overhaul of fair housing grants
The First Circuit on Oct. 19 refused to suspend most of a federal judge's order setting aside HUD's 2025 funding notices for the Fair Housing Initiatives Program. It paused only the part ordering HUD to reissue them on the 2024 model.
What HUD's four July fair housing grant notices offered, as HUD described them
Boston. A federal appeals court has refused to let the Department of Housing and Urban Development go ahead with most of its plan to restructure the Fair Housing Initiatives Program, the grant program that pays private nonprofit groups to investigate housing discrimination.
In an order entered Oct. 19, a three-judge panel of the U.S. Court of Appeals for the First Circuit, led by Chief Judge David Barron, granted HUD's request for a stay only in part. It paused the parts of the district court's decisions of Aug. 26 and Sept. 14 that told HUD to issue new fiscal 2025 funding notices using its 2024 structure. It denied the rest, so the lower court's order setting aside HUD's 2025 notices stays in effect while the appeal goes on.
What HUD planned
On July 2, HUD released four funding notices for the program. Under the 2025 notices, none of that year's money would go to private enforcement work or to continuing multiyear grants. About $46 million of the fiscal 2025 money would go to roughly five large capacity grants, and $10 million to state and local agencies. HUD called the changes a modernization of the program.
The Massachusetts Fair Housing Center and the National Fair Housing Alliance sued on July 23. On Aug. 26, U.S. District Judge Myong J. Joun of the District of Massachusetts found they were likely to win their claim that the changes were arbitrary and capricious, called HUD's stated reasons for the capacity grants "pretextual," vacated the 2025 notices and ordered HUD to allocate the money on its 2024 structure, because the funds were due to expire Sept. 30.
Why the appeals court ruled as it did
The panel said HUD had not made a strong showing that it was likely to win on any of its arguments: that the notices were discretionary decisions courts cannot review, that the judge lacked authority to vacate them, or that his analysis was wrong. It noted that HUD had not addressed "in any substantial way" the finding of pretext.
The order does not explain why it paused the instruction to reissue the notices. WRE News, citing Reuters, reported that the administration had argued Congress since extended the availability of the money to Sept. 30, 2027.
The appeal itself has not been decided. The court invited any party wanting faster briefing on the merits to ask for it. Separate fiscal 2026 notices for education and outreach and for private enforcement grants carry an application deadline of Nov. 2, with awards planned for Feb. 28, 2027, and a July 1, 2027 start, according to the district court's decision.
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