Michigan Attorney General Dana Nessel won a federal appeals court ruling blocking an effort by the Trump administration to restrict housing grant funding. (Photo courtesy of the Michigan Department of Attorney General)

LANSING – Michigan Attorney General Dana Nessel secured a federal appeals court ruling rejecting an effort by the Trump administration to restrict housing grant funding. State officials reported the restrictions could have left thousands nationwide without housing.

Nessel joined a multi-state coalition in suing the U.S. Department of Housing and Urban Development (HUD) in November 2025 after the agency added conditions to its Continuum of Care (CoC) program, limiting how much funding could be used for permanent housing.

“Those changes put hundreds of housing projects at risk of losing funding within just weeks, leaving the thousands of individuals and families who rely on that funding to once again face homelessness during the coming winter,” said U.S. Circuit Judge Julie Rikelman.

Congress established the CoC program in 2009 to support people without housing. It is widely considered the largest resource of federal homelessness assistance funding.

Through the program, HUD distributes annual funding to state and local organizations who provide housing for many people, including children, older adults and domestic violence survivors.

The program had long been administered by HUD to ensure stable housing access before the changes were introduced late last year.

U.S. District Court Judge Mary McElroy ruled in December that HUD’s changes would cause irreparable harm and issued a preliminary injunction blocking the restrictions.

On Wednesday, the appeals court denied 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 Nessel. “I will continue to defend vulnerable Michiganders from heartless, unlawful conditions that weaponize federal funding and pull the rug out from under them.”

In its decision, the appeals court said the states presented substantial evidence that HUD’s planned funding restrictions would be “immediately destabilizing and disastrous for their constituents.”

In 2025, Michigan received more than $100 million through the CoC program, according to Nessel’s office. State officials said the proposed changes could have put an estimated 7,000 total households at risk of losing housing, including approximately 2,000 families with children.

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Sophie Vogelmann can be reached at 906-786-2021 or svogelmann@dailypress.net.