A federal appeals court has rebuffed a Trump administration effort to dictate how homeless service organizations in Los Angeles can seek millions of dollars in funding from the Department of Housing and Urban Development.

The ruling released Thursday also frees up federal funding that already had been approved but not distributed to homeless service organizations in Los Angeles.

At issue was whether the Los Angles Homeless Services Authority could submit an application on behalf of dozens of organizations seeking $239 million in federal funds.

In a 2-1 decision posted Thursday, the U.S. 9th Circuit Court of Appeals largely upheld a distric...