Judge Temporarily Preserves $56 Million in HUD Housing Counseling Grants

Reported October 1, 2026 | Procedural status: Interim order; merits not decided.

A federal judge temporarily prevented nearly $56 million in U.S. Department of Housing and Urban Development housing-counseling grants from lapsing while a lawsuit challenging their cancellation proceeds. The order suspended the September 30 funding deadline but did not grant the groups’ broader request for relief.

The nonprofit plaintiffs say HUD unlawfully rescinded congressionally appropriated funds used for homebuyer education, foreclosure-prevention counseling, and rental assistance, and allege the cuts targeted organizations associated with diversity, equity, and inclusion (DEI). The administration has described its broader funding reductions as a way to eliminate spending it considers ideologically driven. Those are opposing characterizations in the pending case; the judge has not resolved the merits.

Sources: Reuters, October 1, 2026 | Democracy Defenders Fund, September 29, 2026