Louisville, KY, December 24, 2025
A federal judge has ruled in favor of Kentucky and 18 states, restoring over $21 million in federal housing funds previously withheld by HUD. This decision is crucial for local housing initiatives assisting vulnerable populations, including veterans and seniors, and will secure housing for approximately 700 households. The ruling affirms Kentucky’s bipartisan efforts to tackle homelessness and ensure community stability.
Federal Judge Rules in Favor of Kentucky’s Housing Programs
Legal Victory Restores Vital Funding for Local Housing Initiatives
LOUISVILLE, Ky. — A federal judge has issued a ruling that supports Kentucky and 18 other states, mandating the U.S. Department of Housing and Urban Development (HUD) to reinstate over $21 million in federal housing funds that were previously withheld. This decision is critical for local housing programs that aid veterans, seniors, families with children, and individuals with disabilities across Kentucky, highlighting a commitment to support vulnerable populations within our communities.
This judgment signifies not only a win for Kentucky but also a demonstration of the resilience of local leaders advocating for necessary resources. By eliminating regulatory hurdles that threatened housing stability, this ruling allows Kentucky to continue its bipartisan efforts to address homelessness effectively and protect the well-being of thousands of Kentuckians.
Impact on Kentucky’s Housing Programs
The restored funding is anticipated to secure housing for approximately 700 households, benefiting around 1,200 residents across the state. Governor Andy Beshear praised the ruling, emphasizing its potential to avert homelessness and the crucial role such funding plays in fostering community resilience and stability.
Background of the Lawsuit
In November, Governor Beshear became part of a lawsuit that challenged proposed alterations to HUD’s Continuum of Care (CoC) program. The changes planned to enforce a 30% cap on funding for permanent supportive housing projects and mandated states to reapply for funds already allocated by Congress in 2024. Such modifications jeopardized Kentucky’s funding by up to 70% for essential housing projects throughout 118 counties, putting more than $20 million in rental and supportive assistance funding at risk.
States Involved in the Legal Challenge
The lawsuit was not limited to Kentucky—it included 18 other states, namely Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. This collective action symbolizes a strong commitment across diverse regions to uphold critical housing support for their residents.
Potential Consequences of the Policy Changes
Had the administration’s policy changes taken effect, Kentucky risked losing a significant percentage—up to 70%—of more than $15 million designated for permanent supportive housing across most of the state’s counties. Furthermore, over $20 million in federal funding for rental assistance and supportive services faced potential cuts, leading to heightened instances of homelessness and housing instability for countless residents.
Next Steps and Future Implications
The recent court ruling empowers Kentucky and the other involved states to reinstate their housing programs free from the restrictive policy alterations proposed by HUD. This positive outcome reaffirms the importance of federal collaboration in addressing housing needs and enhancing efforts to combat homelessness. State officials, alongside housing advocates, continue to watch federal policies closely to ensure Kentucky can effectively meet its housing assistance goals.
Frequently Asked Questions (FAQ)
What was the lawsuit about?
The lawsuit challenged HUD’s proposed changes to the Continuum of Care program, which threatened to reduce funding for permanent supportive housing projects and required states to reapply for previously approved funds.
How much funding was at risk for Kentucky?
Kentucky faced the potential loss of up to 70% of more than $15 million allocated for permanent supportive housing across 118 counties, along with over $20 million in additional rental and supportive assistance funding.
Which states were involved in the lawsuit?
The lawsuit included Kentucky, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.
What does this ruling mean for Kentucky residents?
The ruling ensures that Kentucky can continue its housing programs without the proposed funding cuts, protecting housing for approximately 700 households and about 1,200 residents, and preventing potential increases in homelessness and housing instability.
What are the next steps following the ruling?
With the court’s decision, Kentucky and the other involved states can proceed with their housing programs as planned, maintaining essential support for their residents and continuing efforts to prevent homelessness.
Key Features of the Housing Funding Lawsuit
| Feature | Description |
|---|---|
| Issue | Proposed changes to HUD’s Continuum of Care program affecting funding for permanent supportive housing projects. |
| States Involved | Kentucky, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. |
| Potential Funding Loss for Kentucky | Up to 70% of more than $15 million allocated for permanent supportive housing across 118 counties, plus over $20 million in additional rental and supportive assistance funding. |
| Impact on Residents | Risked housing for approximately 700 households and about 1,200 Kentuckians, potentially increasing homelessness and housing instability. |
| Outcome | Federal judge ruled in favor of Kentucky and 18 other states, restoring the withheld funds and allowing continued support for housing programs. |
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