New Federal Mandates Will Push 170,000 Back Into Homelessness

​Late last week, HUD released the FY25 Continuum of Care NOFO-- the largest application for federal homelessness funding. Four months overdue, it confirms the worst: ideological and deeply damaging changes we have been bracing for. These changes to the federal funding process represent the largest disruption to our homeless response system in more than a decade. Simply put, new funding mandates will force communities nationwide to cut or eliminate programs that currently keep people housed.

Nationally, more than 170,000 people are expected to return to homelessness due to these changes. Locally, we anticipate hundreds of our clients will be directly and almost immediately impacted. Funding cuts are no longer theoretical; they are imminent. This is a devastating step backward for the nation’s homeless response.

Perhaps the most harmful change is a new cap on Permanent Supportive Housing (PSH), limiting communities to spending no more than 30% of their funding on this model. Today, communities across the country invest closer to 90% because PSH is an evidence-based solution that ends homelessness for people with disabling conditions. Housing Forward has provided Supportive Housing for nearly 20 years, and last year 92% of people in our programs remained stably housed. Today, we have 253 clients in Permanent Supportive Housing programs who could be forced to return to homelessness under these changes. These are seniors, veterans, families, and people with disabilities who are most at risk under this new directive.

There are also extremely troubling new funding requirements that reward organizations that comply with the administration's harmful policies around immigration enforcement. It also penalizes organizations for “engaging in racial preferences, using a definition of sex ‘other than binary,’ or conducting activities viewed as ‘harm reduction.’”

Compounding all of these challenges, HUD will not announce funding awards until May 2026, leaving a six-month federal funding gap for organizations entrusted to deliver vital housing and services, including ours.

Without question, homelessness will increase under this new paradigm.

Our values have not changed. We believe housing is a basic human right. Our priority is protecting our clients and doing whatever we can to ensure their services are not interrupted. In the coming weeks, we will be working closely with local, state, and national partners to navigate this new reality and identify solutions wherever possible. We will continue to share updates, resources, and ways to get involved whenever possible. 

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CONTACT YOUR REPRESENTATIVES

Context and Advocacy Toolkit from the National Alliance to End Homelessness

What We’re Asking Congress to Do 

The radical changes included in the FY2025 CoC Program NOFO are being driven by the administration and HUD—not Congress. However, because these changes shift funding priorities that would typically require Congressional oversight, it’s important to alert Members of Congress and encourage them to take action. They can influence the administration to revise or withdraw the proposal, or they can introduce legislative language to block it from moving forward.

Early and frequent engagement is essential to raise awareness, lay the groundwork for a strong response, and determine if it’s possible to stop dangerous proposals from moving forward. 

Actions Members of Congress Can Take

Engage the White House Urge Members of Congress to directly communicate with the White House and HUD to maintain the two-year CoC funding cycle as approved by Congress in 2024. Additionally, Members of Congress should remind the Administration that changes to program priorities normally requiring legislative approval should be routed through the appropriate authorizing committees. 

Advance Protective Language Urge Members of Congress to support the inclusion of language in an upcoming appropriations bill that would ensure the renewal of existing programs for 12 months, essentially preserving the two-year funding cycle for the CoC Program from last year.

Advocates from across the country have already generated bipartisan support from Representatives and Senators for renewing CoC grants expiring in 2026, including a sign-on letter led by House Republicans and a sign-on letter led by Senate Democrats. Although Congress did not secure this protective language in the recent Continuing Resolution bill, now that the NOFO is out and the worst of our concerns have been affirmed, we must leverage this information to ensure that both Democrats and Republicans in the House and Senate are concerned enough to include it in an upcoming appropriations bill.