Jennifer Ludden

States, cities and non-profits warned that HUD's overhaul could push 170,000 people back into homelessness.

In a surprise move, the agency told the court it will withdraw its changes for now to address such concerns.

But a government lawyer said HUD still intends to shift toward more transitional housing and mandated treatment.

The agency has also set new conditions for who can get money based on alignment with Trump administration policies.

such as DEI and restricting transgender rights.

The two lawsuits allege all those changes are unconstitutional.

They say Congress has made clear homelessness funding should be based on need and spent on programs with proven success.

Jennifer Ludden, NPR News.

The federal housing agency HUD wants to shift billions of dollars away from permanent housing toward transitional housing, and it says it will deny funding to programs that promote DEI, acknowledge people who are transgender or non-binary,

or don't cooperate with federal immigration enforcement.

The lawsuit by the mostly Democratic-led states says those conditions are unlawful, and it says Congress mandated that homelessness funding be distributed based solely on need.

HUD Secretary Scott Turner has said the funding changes are about promoting self-sufficiency.

Advocates for ending homelessness say the overhaul could push 170,000 people back onto the streets.

Jennifer Ludden, NPR News, Washington.

The federal housing agency HUD says the idea is to promote self-sufficiency and get at root causes of homelessness, which it says are specifically addiction and mental illness, very common among those living outside.

Now, the changes are a rebuke to longstanding federal policy.

It's called Housing First.

And under that, the vast majority of this funding has long gone to permanent housing that offers people treatment, but it doesn't require it.

The Trump administration had asked the high court to block full food benefits after a lower court judge ordered them.

The extended stay means states can still make only partial payments.