It’s the second time this year that U.S. District Judge Mary McElroy rejected the government’s attempt to change Continuum of Care grant funding. MANHATTAN (CN) — A federal judge on Friday shut down the Trump administration’s latest bid to shift federal homelessness funding away from permanent housing initiatives, finding its efforts to be a violation of the Administrative Procedure Act. McElroy ruled the department ultimately failed to consider public feedback before issuing its 2026 Notice of Funding Opportunity to cap long-term Continuum of Care grants. If allowed to stand, the states warned it would have dismantled safety nets and caused a spike in nationwide homelessness. McElroy was the judge in that case, too, and ruled in favor of the states to block the cap.