Under a pending policy change, that figure would fall to about 30%, with available funding cut from $3.3 billion to around $1.1 billion in 2026, the report said. Families with children, people with chronic illnesses and those with disabilities are among the most likely to be affected. Two HUD employees said they were barred from consulting agency attorneys — raising questions about whether the change complies with the McKinney-Vento Homeless Assistance Act. That legislation created the Continuum of Care program to end homelessness through a mix of housing resources. The policy would also penalize applicants that previously used racial preferences or recognized transgender people in their programs, according to internal HUD documents.