Federal judge blocks the cancellation of $56 million in housing grants by the Trump administration

A federal judge in Washington D.C. temporarily blocked President Donald Trump’s administration from cancelling nearly $56 million in housing counselling grants, preserving the funding while the legal challenge moves forward, as Reuters reports.

In an order issued late on Wednesday, District Judge Jia Cobb suspended the September 30 deadline, which would normally have made the funds expire and return to the Treasury. The judge wrote that she is not currently in a position to accept or reject the plaintiff groups’ request for broader relief, but said she did not want to allow the deadline to pass if that would make the plaintiffs permanently lose access to the funds.

Housing counselling groups and advocacy organisations sued the Department of Housing and Urban Development (HUD) on Tuesday, claiming that the agency illegally cancelled congressionally approved funds used for homebuyer education, foreclosure prevention counselling and rental assistance services, and failed to explain the reversal from a multi-year policy.

The plaintiffs also argue that the cancellations amounted to illegal retaliation against organisations based on their views, violating First Amendment protections. The lawsuit was filed by the Democracy Defenders Fund and the Jacobson Lawyers Group in federal court in Washington, on behalf of 10 non-profit organisations, including housing counselling agencies, community development organisations and advocacy groups.

The administration has said that the programme funds organisations with agendas focused on diversity, equity and inclusion (DEI), which it opposes. In a September 25 statement, the White House said the grants went to beneficiaries with “discriminatory DEI-focused agendas” and included the housing counselling funds in a broader package of spending cuts of nearly $1 billion.

“These funds have helped us since the 2008 foreclosure crisis,” said Seema Agnani, director of the National Coalition for Asian Pacific American Community Development. Meanwhile, Tianna Mays, legal director of the Democracy Defenders Fund, called the decision “a welcome step towards curbing the administration’s reckless actions, which threaten the housing security and stability of thousands of individuals and families across the country.” The parties are expected to file their responses by October 19.