Judge Blocks NYC’s Bid to Swiftly Recover $80.5 Million in FEMA Grant for Housing Illegal Immigrants

The money had been given to the city during the Biden administration to offset the overcrowding of facilities housing illegal immigrants.

Department of Homeland Security Secretary Kristi Noem talks briefly with reporters after attending a Senate Homeland Security and Governmental Affairs Committee hearing in the Dirksen Senate Office Building on Capitol Hill in Washington on Feb. 25, 2025. Chip Somodevilla/Getty Images

A federal judge on March 5 rejected a bid by New York City to force the Trump administration to immediately return its $80.5 million in grants, which were intended to fund portions of the city’s expenses for housing illegal immigrants.

In her ruling, U.S. District Judge Jennifer Rearden said the city failed to prove irreparable harm and could still recover the money if it succeeds in the lawsuit. The ruling came after a roughly two-hour hearing in Manhattan federal court.

On Feb. 4, city officials sued when the Federal Emergency Management Agency (FEMA), and its overseer, the Department of Homeland Security, clawed back funds from a city bank account.

Homeland Security Secretary Kristi Noem announced on Feb. 12 that she had pulled the FEMA funds, which had gone towards housing illegal immigrants in New York City hotels.

“FEMA was funding the Roosevelt Hotel that serves as a Tren de Aragua base of operations and was used to house Laken Riley’s killer,” she wrote in a post on the social platform X.

Laken Riley, then a 22-year-old nursing student, was murdered by Jose Antonio Ibarra in Georgia on Feb. 22, 2024. Ibarra had entered the country illegally from Venezuela in 2022.

On Feb. 12, Noem said the money represented “the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.”

In response, the city described the clawback as a “money grab” that sidestepped Congress’ intent in appropriating the funds.

Its lawsuit called on Rearden to order the Trump administration to immediately return the $80.5 million and to stop taking similar actions.

FEMA originally gave New York City the money to offset the cost of housing illegal immigrants in city hotels after illegal immigration surged during the Biden administration.

President Donald Trump has made it a priority of his second term to crack down on illegal border crossings and increase deportations.

In a Feb. 28 court filing, the Justice Department accused New York City of letting the Roosevelt Hotel in Midtown Manhattan become a “base of operations” for crime while housing illegal immigrants.

Agency lawyers argued that the funding pause was justified while the Trump administration investigated. Because the $80.5 million reimbursed the city for expenses it had already incurred, the Justice Department implored Rearden that there was no emergency for ordering a return of the money.

The city responded on March 3, arguing that proposed legislation intended to end the illegal immigrant shelter program could create a situation where it never gets the funds back. The city also said the concerns about crime amounted to “red herrings” because FEMA previously determined it was entitled to the funds.

Last month, New York City Mayor Eric Adams said the Roosevelt Hotel would no longer be used as a shelter following a decrease in illegal immigrant arrivals.

Reuters contributed to this report.