On September 21, 2026, a federal court vacated HUD’s November 2025 notice interpreting the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The notice had classified programs such as the Community Development Block Grant (CDBG), HOME, and Continuum of Care as “federal public benefits” under PRWORA. The decision came from the U.S. District Court for the District of Rhode Island in New York v. U.S. Department of Justice. The same opinion also struck down PRWORA notices issued by DOJ, HHS, the Department of Labor, and the Department of Education.
For Texas properties, the requirements are the same as they were before the ruling. TDHCA has not changed its multifamily PRWORA rules, and properties with HOME, HOME-ARP Rental, or National Housing Trust Fund (NHTF) units continue to verify lease signers.
The Court’s Decision
The court held that HUD violated the Administrative Procedure Act by issuing the notice without first going through notice-and-comment rulemaking. It found the notice departed sharply from how HUD had applied PRWORA in the past. The order vacates the notices, bars the agencies from enforcing them against the plaintiffs, and confirms that HUD, HHS, DOL, and ED may still adopt PRWORA rules through notice and comment. The plaintiffs are 21 states and the District of Columbia; Texas did not join the lawsuit.
TDHCA’s Multifamily PRWORA Rules
The TDHCA Board adopted its multifamily PRWORA rule on April 9. The final rule reflects several recommendations from joint comments submitted by TAAHP and the Texas Apartment Association (TAA), along with input from other stakeholders. The rule requires legal status verification for lease signers at 391 properties with HOME, HOME-ARP Rental, or NHTF units, and because it applies property-wide, it reaches all 28,895 units in those developments. Implementation began October 1, 2026.
TDHCA’s rules are state rules, and only the TDHCA Board can amend or repeal them. Throughout the rulemaking, TDHCA’s position was that Texas had to keep moving forward because it was not covered by the litigation’s pause, and the final order leaves Texas in the same position. TDHCA’s rule also cites HUD’s 2025 grant agreements as its federal basis, while the court ruled on the notices themselves. Properties should continue verification under §10.628 unless TDHCA issues different direction.
HUD could still appeal, as the government did with earlier rulings in this case, or reissue its interpretation through formal rulemaking. HUD’s separate proposed rule on verifying eligible status for every household member closed for comment on April 21 and has not been finalized.
TDHCA Resources
TDHCA has posted forms, trainings, and guidance for owners and managers on its PRWORA/SAVE page. Materials for multifamily properties include: