Judge Blocks Trump’s $56 Million Cut to Housing Counseling
A federal judge has temporarily blocked the Trump administration from canceling nearly $56 million in federal housing-counseling grants, preserving funding used for homebuyer education, foreclosure prevention and rental assistance while a legal challenge proceeds.
U.S. District Judge Jia Cobb halted the planned cancellation and suspended a September 30 deadline that would have allowed the grants to lapse. The order keeps the money available while nonprofit housing groups challenge the Department of Housing and Urban Development’s decision to rescind the funds.
The grants support counseling programs that help households navigate mortgages, avoid foreclosure, find rental assistance and understand home-purchase options. The plaintiffs argue that Congress appropriated the money for those purposes and that HUD cannot simply erase the program through an executive policy change.
The lawsuit was brought by Democracy Defenders Fund and Jacobson Lawyers Group on behalf of 10 nonprofit organizations. The groups argue that the administration acted unlawfully and retaliated against organizations whose work or language it associated with diversity, equity and inclusion.
The White House has defended the cuts by saying the grants supported what it calls “DEI-centric discriminatory agendas.” The housing-counseling money is part of a broader package of nearly $1 billion in attempted rescissions across federal programs that the administration has targeted as wasteful or ideologically objectionable.
At stake is a basic question about executive power over money Congress has already appropriated. The plaintiffs say the administration cannot use political disagreement with grantees as a basis to nullify funding decisions made through the legislative process.
The immediate effect of Cobb’s order is practical: counseling organizations can continue operating while the case moves forward instead of losing funding before a court can decide whether the rescission is lawful. That matters because housing counseling is often used by borrowers already under financial stress, including families facing foreclosure or eviction.
The dispute also lands in the middle of a national housing affordability crisis. Mortgage costs, rents and home prices remain far above pre-pandemic levels in many parts of the country, while low-income households are especially vulnerable to losing housing when a financial shock hits.
The administration’s response to the lawsuit is due October 19. Until then, the court order prevents HUD from allowing the grants to expire, keeping the money in place while the legal fight over Congress’s spending power and the administration’s anti-DEI agenda continues.
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