What happened?
On November 13, the U.S. Department of Housing and Urban Development (HUD) issued the FY2025 Continuum of Care (CoC) Program notice of funding opportunity (NOFO) totaling $3.9 billion. NHCHC issued a statement in response, illustrating the significant harm that will occur as a result of new provisions that will cause people to lose their housing.
What’s the problem?
The NOFO makes significant changes to how CoC programs operate, gives local communities a very short deadline to apply for funding (due January 14, 2026), and, as a result of the late issuing, delays the award of funds until May 1, 2026 at the earliest—creating a gap in funding of at least five months for some programs. These gaps will result in a disruption of services and some programs may have to pause operations altogether.
What are the biggest changes?
This NOFO makes drastic changes to CoC operations and existing programs. Below are five of the biggest changes (a more detailed breakdown of the NOFO can be found here.
- The biggest, most concerning change: Only 30% of a CoC’s funding is now protected (down from 90%), which leaves 70% of the CoC funding completely up in the air and subject to competition and discretion.
- Permanent housing funding is newly capped at 30% while the rest must be spent on high-barrier transitional housing or other projects that align with the Administration’s priorities. Because of this change alone, 170,000 people who were previously homeless—but now live in permanent housing—will lose rental assistance and fall back into homelessness.
- New prohibitions can disqualify any project, which puts entire programs at risk.
- The NOFO emphasizes onsite, mandated substance use treatment.
- “Public safety” is a priority, which includes cooperation with law enforcement/ICE, involuntary commitment, and encampment sweeps.
What’s the impact on local communities?
Nationwide, at least 170,000 people are expected to lose their supportive housing because of this sudden policy and funding shift. Grants begin expiring in January, with more than one third of all CoC projects running out of current funding by June. Delayed funds will disrupt services as organizations will lack funds needed to make rent payments to landlords, cover operating costs, and payroll.
Source: National Alliance to End Homelessness: State and Local Impacts of HUD’s Housing Cuts
How many people will lose housing in YOUR state?
How much funding will be lost in YOUR state?
“At a time when we should all be focused on scaling up and improving our most effective programs, this administration is instead focused on tearing them down. These sudden decisions will cause programs to be totally defunded or go without federal funds for at least five months, and likely longer.”
~ Ann Oliva, CEO, National Alliance to End Homelessness
“It has taken two decades to build a system that keeps this vulnerable population off the streets. HUD’s change in priorities destabilizes our entire housing system – just like a game of Jenga – leading to increased homelessness, strains on the health system, and higher taxpayer costs.”
~ Rhonda Hauff, CEO, Yakima Neighborhood Health Services
What court challenges have happened?
Two lawsuits have been filed: A coalition of 20 states filed the first lawsuit on November 25 and the National Alliance to End Homelessness (together with other partners) filed the second lawsuit on December 1. No hearings have yet been scheduled. Still, lawsuits take time and will not help one of the biggest issues at hand: CoC funds will start to run out next month, putting individuals at risk of losing housing and services.
TAKE ACTION
What advocacy is needed NOW?
Our partners at the National Alliance to End Homelessness are calling on Congress to include a provision in the upcoming budget bill directing HUD to renew all existing Continuum of Care grants expiring during calendar year 2026 for an additional 12-months. This is a no-cost provision and is consistent with longstanding bipartisan Congressional intent. Critically, this provision will ensure there are no unnecessary gaps and delays in resources.
The homelessness advocacy community should quickly advocate for Congress to act by taking the following steps:
- Contact your Congressional representative:Ask them to include a provision in the upcoming budget bill directing HUD to renew all existing CoC grants expiring in calendar year 2026 for 12 months. Members of Congress should remind the Administration that changes to program priorities normally requiring legislative approval should be routed through the appropriate authorizing committees.
- Support a no-cost extension of current funding:Urge Members of Congress to support and prioritize budget language that ensures the renewal of existing programs for 12 months, essentially preserving the two-year funding cycle for the CoC Program from last year.
- Describe the positive impact that permanent housing makes for your community: Indicate how pulling away from permanent housing will impact the lawmaker’s jurisdiction and point out other sectors in the community which are concerned about the NOFO, including businesses, landlords, hospitals, and houses of worship.
Where is more information available?
NAEH has made a number of documents available that have more details on the CoC NOFO:
- FY2025 CoC Program Competition Application Information
- Advocacy Guide on FY2025 CoC Program Funding
- Overall Side By Side Comparison of FY24 and FY 25 CoC Program Competition NOFOs
- Side-By-Side Comparison of CoC Scoring FY2024/25 vs. FY2025
Media coverage:
- Local Governments and Nonprofit Groups Challenge Unlawful New Trump-Vance Administration Restrictions That Threaten Proven Solutions to Homelessness | Democracy Forward
- The Trump administration plans major shift away from long-term housing for homelessness | NPR
- Trump administration policy change makes deep cuts to homeless permanent housing program | Politico
- Trump Administration Proposes a Drastic Cut in Housing Grants | New York Times (gift link)
