Minnesota AG Ellison's federal lawsuit victory stops billions in funding cuts to homeless housing services

Louis Krauss, The Minnesota Star Tribune on Jun 30, 2026

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Minnesota Attorney General Keith Ellison and a coalition of states’ attorneys have protected more than $3 billion in federal funding for people experiencing homelessness after winning a lawsuit against the Trump administration’s attempt to make significant cuts.

In November 2025, the Department of Housing and Urban Development (HUD) issued a new federal grant application form that Ellison and co-plaintiffs argued was illegal and would have slashed Continuum of Care funding for permanent supportive housing programs. The cuts would have put an estimated 170,000 people nationwide at risk of losing housing, the plaintiffs said.

But on Monday, a federal judge in Rhode Island sided with Ellison and the coalition of 19 attorneys from other states who filed the suit along with two governors.

The funds support services for some of the groups most at risk of becoming homeless such as veterans, people with disabilities and transgender people, according to Ellison’s office. Ellison said the ruling in favor of the plaintiffs “protected vulnerable Americans from more gratuitous cruelty and the rule of law from another blatant assault.”

“Trump’s effort to leave no billionaire behind, by making war on Americans just trying to afford their lives, has taken many forms, including this shameful attempt to keep homeless folks out of stable housing,” Ellison said in the suit.

Jennifer Ho, the commissioner of the Minnesota Housing Finance Agency, said in a court declaration at least 52 permanent supportive housing properties in the state rely on Continuum of Care funding to operate. The loss of the funding could have led to evictions, the closing of some affordable housing units and the destabilization of facilities that serve extremely vulnerable populations, Ho said.

Even if homeless service projects were funded under the new policies, there would still likely have been gaps or loss of funding for at least 34 sites across Minnesota, she added.

The lawsuit also argued against HUD’s attempt to bar the Continuum of Care funds from organizations acknowledging the existence of transgender and nonbinary people. Ellison and the co-plaintiffs said this rule violated federal law and violated the United States Congress’ power to control spending.

In making her ruling, United States District Judge Mary McElroy said HUD’s sudden overhaul of the funding programs “failed to substantively consider” the impact it would have on the organizations that administer homeless services and their vulnerable clients.

McElroy sided with Ellison and the other states by awarding summary judgment, but she denied their request for a permanent injunction.