State of Washington v. U.S. Dep’t of HUD — First Circuit stays funding-rule judgment pending appeal

Case
State of Washington et al. v. United States Department of Housing and Urban Development et al.; National Alliance to End Homelessness et al. v. United States Department of Housing and Urban Development et al.
Court
U.S. Court of Appeals for the First Circuit
Judge
Montecalvo; Aframe; Dunlap
Date Decided
September 16, 2026
Docket No.
26-1922; 26-1923
Topics
Administrative law, HUD funding, homelessness, stays pending appeal
Source
Read the full opinion

Background

States, nonprofit organizations, and local governments challenged a HUD Notice of Funding Opportunity governing awards under the Continuum of Care program. The notice set aside $1.3 billion for transitional-housing and “supportive service only” projects.

The district court granted summary judgment to the plaintiffs on their claim that HUD unlawfully issued the set-aside without notice-and-comment procedures required by 42 U.S.C. § 11386b(d). HUD and related federal defendants sought a stay of that judgment pending appeal.

The Court’s Holding

The First Circuit granted HUD’s motion for a stay pending appeal under the standard in Nken v. Holder. The court concluded that HUD made a strong showing that it was likely to succeed in challenging the district court’s determination that the set-aside was a “bonus or other incentive[]” subject to § 11386b(d)’s notice-and-comment requirement.

The court also found irreparable injury absent a stay. HUD faced a December 1, 2026 deadline to make Continuum of Care awards, and without a stay could not timely implement the notice, creating funding gaps.

Key Takeaways

  • The court stayed the district court’s summary-judgment order; it did not finally resolve the merits of the appeal.
  • HUD is likely to prevail, the panel said, on its argument that the funding set-aside is not a statutory “bonus or other incentive[].”
  • The impending deadline for Continuum of Care awards supported a finding of irreparable harm to HUD.

Why It Matters

The order allows HUD to proceed with the challenged Continuum of Care funding notice while the appeal is pending. It also signals the panel’s preliminary view that the statutory notice-and-comment provision may not reach this type of funding set-aside.

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