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Cambridge and Boston joined a lawsuit on Tuesday to block a planned cut to federal housing funding by the Trump administration, which could push thousands of people across the two cities out of permanent and transitional housing.

The funds in question are allocated through the Continuum of Care program, which provides funding for local organizations that facilitate permanent housing and supportive services for formerly unhoused people. In 2024, Continuum of Care funds were awarded on a two-year cycle that was intended to stretch through 2026.

But the Department of Housing and Urban Development told cities in November that it would not award Continuum of Care grants for fiscal year 2025 and would instead run a new competition for the funding. Under the new competition, HUD announced that it would award only one-third of the amount it had originally allocated to permanent housing, directing the remainder of the funds toward transitional housing assistance with work or service requirements.

New grants will not be awarded until May under the plan, leaving some cities without funding for months after existing grants begin to expire in January.

The lawsuit alleges that the reversal is unlawful because the new criteria were announced after a statutory deadline to make changes to the program in June.

In Cambridge, the changes to funding criteria could lead the city to lease $4.6 million of the $6.4 million Continuum of Care funding it previously expected to receive. The city’s Continuum of Care funds provide housing to 214 individuals and families transitioning from homelessness.

The cuts are part of an anticipated loss of more than $8 million in federal housing funding in total to Cambridge. The city also expects to lose $3.8 million from the Emergency Housing Vouchers for Permanent Supportive Housing program, which provides housing for nearly 130 formerly homeless Cambridge residents.

Boston expects to lose $29 million in funding for permanent supportive housing due to the Continuum of Care cuts, according to a Tuesday press release from Boston Mayor Michelle Wu ’07, which estimated that more than 1,100 people in Boston could lose housing as a result.

In 2025, Baston was set to receive approximately $48 million through Continuum of Care programs. These grants funded housing for more than 2,000 formerly homeless households and helped fund 19 nonprofit organizations. HUD’s changes in criteria would require Boston to eliminate $29 million in permanent supportive housing projects of the $48 million they planned to receive. They could also lead to job losses at nonprofits, which compensate more than 125 people through Continuum of Care funds.

Boston joined the lawsuit to “stop the Trump administration from creating unlawful and unreasonable restrictions on funding for proven solutions to homelessness, threatening to push hundreds of thousands of families and individuals onto the street as cold winter months arrive,” Wu wrote in the press release.

San Francisco, Nashville, Tucson, King County in Washington, Santa Clara County in California, and several nonprofit organizations that focus on homelessness are also plaintiffs in the case.

—Staff writer Claire A. Michal can be reached at [email protected].