Arizona joins new lawsuit against HUD over cuts to housing insecurity services

PHOENIX — Arizona Attorney General Kris Mayes is joining a lawsuit that accuses the federal housing department of breaking its own rules, potentially putting tens of thousands at risk of losing their homes.

The coalition of attorneys general said new changes at the U.S. Department of Housing and Urban Development (HUD) are putting funding for housing services at risk during a time Americans are already struggling financially.

The complaint argues HUD bypassed Congress in creating new rules that clash with federal law and its own regulations. It is also Arizona’s 31st multistate legal action against Washington this year.

“More and more Arizonans are being pushed into homelessness in Donald Trump’s unaffordable economy,” Mayes said in a Tuesday announcement.

According to Axios, the funding shift could leave nearly 1,400 families in metro Phoenix homeless next year.

“These unlawful drastic changes to long-standing HUD policies passed by Congress will push even more into homelessness, straining our local resources and making it harder for providers to serve some of the most vulnerable people in our state,” Mayes said.

Details about multistate lawsuit over new HUD policies

Mayes and 20 other attorneys are suing the federal housing department — as well as its secretary, former NFL player Scott Turner — over changes to its Continuum of Care grant program.

Here are some of the controversial changes the coalition is protesting:

• Cutting funding for permanent housing and renewals: Less money can now be spent on long-term housing projects and continuing existing programs.
• New conditions on funding access: Providers must require residents to accept services (like counseling or treatment) before they can get housing.
• Penalties for localities: The coalition said communities that don’t align with the Trump administration’s homelessness policies may lose funding.
• Departure from past practice: Previous changes were gradual to avoid disruption, while these new rules are sudden and sweeping, creating potential uncertainty.

Essentially, HUD is shifting money away from permanent housing, adding strict new conditions for providers and residents and penalizing communities that don’t adopt tough anti-homelessness laws, according to prosecutors.

How do these moves by the federal housing department impact Arizona?

Homelessness advocates learned of the funding changes two weeks ago, according to Maricopa Association of Governments Community Initiatives Director Amy St. Peter.

“HUD has issued a notice of funding opportunity,” St. Peter told KTAR News 92.3 FM. “They released that on Nov. 13th. The deadline to apply for that is Jan. 14, 2026.”

She said this was a surprise to the organization, which is a nonprofit where 27 cities, three Native nations, the state transportation department, Maricopa County and part of Pinal County work together to improve life for residents.

“We were awarded two years of funding … in last year’s competition, and HUD, in July, had said that they were rescinding the second year of funding, which is particularly problematic because HUD has announced that they will release the awards in May of 2026,” St. Peter said. “So not only are they facing a gap, they’re facing also a very uncertain funding future.”

Put simply, projects that were promised funding earlier this year may not get the money on time. Because HUD is changing how grants are awarded, contracts could be delayed even further, leaving many programs without funding for months. With the new rules, there’s no guarantee that projects will actually get funded at all right now.

“It is concerning because the people that would be affected are the most vulnerable of the people experiencing homelessness,” St. Peter said. “They’re grappling with a lot and they’re safe right now. They’re in housing — but all of that could change.”

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