A federal judge has ordered the U.S. Department of Housing and Urban Development (HUD) to keep $57.5 million in housing counseling funds available while a legal challenge over the administration's attempt to cancel the funding moves forward.
The funding was approved by Congress for fiscal year 2025 and was set to expire September 30. The National Urban League and nine housing counseling organizations filed a lawsuit arguing that the administration cannot withhold funds Congress directed HUD to spend without congressional approval. The groups are also challenging restrictions placed on eligible counseling services, including limitations affecting prospective and existing homeowners.
The court's ruling preserves the funding but does not require HUD to distribute it or determine whether the administration's actions are lawful. The case will continue as the administration and plaintiffs submit additional filings in October.
For the housing market, the dispute highlights the ongoing importance of counseling programs that help prospective buyers navigate financing, homeownership, and affordability challenges. Any reduction in these services could create additional barriers for households already facing elevated home prices and borrowing costs.
The funding remains protected for now as the court considers the broader legal challenge.
Source: National Association of Realtors
