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.