The 1st U.S. Circuit Court of Appeals on Wednesday put on hold a Rhode Island judge’s order blocking the Trump administration from changing grants under the $4 billion Continuum of Care program. The Department of Housing and Urban Development (HUD) wants to reserve $1.3 billion of more than $4 billion appropriated for fiscal 2026 for transitional housing and supportive-service-only grants, reducing the share directed to permanent housing. The program has funded states, local governments and nonprofits since 1987, traditionally following a housing-first model (permanent housing without preconditions) while also supporting childcare, job training, mental-health counseling and transportation. Twenty-two mostly Democratic-led states, the District of Columbia and advocacy groups sued, arguing the shift could cut funding for permanent housing and put tens of thousands of formerly homeless people at risk of losing their homes. U.S. District Judge Mary McElroy ruled in 2025 and again last month that HUD had violated the Administrative Procedure Act by adopting the changes without public notice and an opportunity to comment. The appeals panel said the administration was likely to prevail on its argument that the allocation decision did not require notice-and-comment procedures. It also said HUD could face irreparable injury because the agency has until Dec. 1, 2026, to award Continuum of Care funds.