By David Hood-Nuño
WASHINGTON, Oct 1 (Reuters) - A federal judge temporarily blocked the Trump administration from canceling nearly $56 million in housing counseling grants, preserving the funding while a legal challenge to the cuts moves forward.
In an order issued late on Wednesday, US District Judge Jia Cobb suspended the September 30 deadline that would ordinarily cause the funds to lapse and revert to the Treasury, writing that she was "not presently in a position to grant or deny" the groups'
request for broader relief but was also hesitant to allow the date to pass if doing so would cause the plaintiffs to permanently lose access to the funding.
Housing counseling groups and advocacy organizations sued the US Department of Housing and Urban Development on Tuesday, alleging the agency unlawfully rescinded congressionally appropriated funds used to provide homebuyer education, foreclosure prevention counseling and rental assistance services, and failed to explain a reversal of longstanding policy.
The plaintiffs also argue the cancellations amounted to unlawful retaliation against organizations based on their viewpoints, violating First Amendment protections.
The administration has said the program funds organizations with diversity, equity and inclusion-focused agendas that it opposes. In a September 25 statement, the White House said the grants went to recipients with "DEI-centric discriminatory agendas" and included the housing counseling funding in a broader package of spending rescissions.
The White House referred a request for comment to the Office of Management and Budget, which did not immediately respond.
MAJOR NATIONAL CONCERN
Housing affordability remains a major concern nationally, with elevated home prices, mortgage rates and rental costs increasing pressure on households. The nonprofit groups say the funding cuts would force reductions in counseling services aimed at helping families avoid foreclosure, secure affordable housing and achieve homeownership.
Democracy Defenders Fund and Jacobson Lawyers Group filed the lawsuit in federal court in Washington on behalf of 10 nonprofit organizations, including housing counseling agencies, community development organizations and advocacy groups.
Housing counseling programs, which have received federal support for decades, help consumers navigate mortgage applications, loan modifications, budgeting and homeownership.
The organizations say they expected to receive funding after Congress appropriated the money, but instead faced months of delays before HUD moved to cancel the grants.
The stakes extend beyond lost funding for plaintiffs like the National Coalition for Asian Pacific American Community Development. The organization has spent years investing in staff and adapting to evolving federal certification requirements to administer HUD-funded housing counseling programs, CEO Seema Agnani said.
"We have depended on these dollars since the foreclosure crisis of 2008," Agnani said.
The housing counseling grant cuts are part of a nearly $1 billion package of spending reductions announced by the White House, which said the cuts target programs it views as wasteful, ideological or tied to diversity, equity and inclusion initiatives.
The lawsuit is scheduled to continue with responses from the plaintiffs and the government by October 19.
“This is a welcome step toward reining in the administration’s reckless actions that threaten the housing security and stability of thousands of individuals and families across the country," said Tianna Mays, legal director for Democracy Defenders Fund, in a statement.
(Reporting by David Hood-Nuño in Washington; Editing by Kat Stafford and Bill Berkrot)
