A federal appeals court on Monday refused to allow President Donald Trump's administration to redirect money away from over 100 non-profit organizations that had historically received funding to help prevent and investigate housing discrimination.

The Boston-based 1st US Circuit Court of Appeals largely rejected the administration's request to lift an order by a lower-court judge who had blocked the US Department of Housing and Urban Development from implementing sweeping changes to a decades-old grant program designed to combat housing discrimination.

Boston-based US District Judge Myong Joun had sided in August with the National Fair Housing Alliance and the Massachusetts Fair Housing Center, which sued in July to block what they said was the latest effort by HUD under Trump to roll back fair housing enforcement.

A three-judge 1st Circuit panel comprised only of appointees of Democratic presidents said the Trump administration had failed to demonstrate it was likely to succeed in finding that Joun exceeded his authority by issuing that decision.

The court declined to put most of Joun's decision on hold while the government pursues its appeal. It agreed to lift one part requiring HUD to issue new notices of funding opportunities for fiscal year 2025 that would require grants to be awarded under the 2024 system.

Joun imposed that condition at a time when the funding was rapidly set to expire on September 30. But the administration said that after he ruled, the basis for that part of Joun's decision was eliminated when Congress through a funding measure effectively extended the expiration date to September 30, 2027. HUD and lawyers for the plaintiffs did not immediately respond to requests for comment.

The case centers on the Fair Housing Initiatives Program, which Congress created in 1987 and that has long provided multi-year grants for fair housing organizations to help enforce the Fair Housing Act.

In the past, HUD would typically award over 100 grants ranging from $75,000 to $425,000, according to lawyers for the fair housing groups. That funding supported a network of organizations that assist people claiming they experienced housing discrimination.

In July, HUD moved to overhaul that system by announcing it would not allocate any of its congressionally appropriated funding for the 2025 fiscal year to private enforcement initiatives or to multi-year grants issued through the Fair Housing Initiatives Program.

HUD instead planned to use $46 million of the $56 million that Congress had appropriated for just five grants, $25 million of which would go to a law school. The remaining $10 million could go to a state or local agency.

The Trump administration also sought to force grant recipients to sign onto unrelated conditions to receive funding, by imposing requirements that they not use any funding to support "gender ideology" or "illegal immigration."

Joun, an appointee of Democratic President Joe Biden, said HUD failed to provide a reasoned explanation or rely on relevant data in crafting the restructuring, which "effectively bars the very housing organizations that have been effectuating FHIP's mission year after year since its enactment."

The Trump administration swiftly appealed, contending HUD had discretion to decide how to allocate the funds and that the judge "had no basis whatsoever to dictate how HUD should disburse the funds in question." "The orders micromanage HUD’s administration of a national program and prevent HUD from exercising the discretion that Congress gave it," the US Department of Justice argued on the administration's behalf.

Massachusetts Fair Housing Center, et al v. Department of Housing and Urban Development, et al, 1st Circuit, No. 26-2084.

For the plaintiffs: Lila Miller of Relman Colfax For HUD: Sarah Clark Griffin of the US Department of Justice US judge blocks Trump overhaul of funding for fair housing groups