HUD Pauses Continuum Of Care Changes That Would Affect Homeless Housing Funding

The Department of Housing and Urban Development on Monday pressed pause on policy changes that would drastically cut housing funding aimed at combating homelessness. 

HUD withdrew the notice of funding opportunity for the Continuum of Care grant program on Monday afternoon, less than two hours before a court hearing for two lawsuits challenging the changes announced in November, Politico reported. 

The lawsuits have been brought by 20 states and a group of nonprofits and local governments, respectively. 

Despite the timing of the withdrawal, a representative for HUD told Bisnow in an email that the pause won’t result in sweeping revisions to the significant funding changes that are the basis for the lawsuits. 

"HUD fully stands by the fundamental reforms to the FY25 Continuum of Care (CoC) Notice of Funding Opportunity (NOFO) and will reissue the NOFO as quickly as possible with technical corrections," a HUD spokesperson wrote.

"The Department intends to make resources available in a timely manner so grantees with measurable results can continue to support vulnerable populations. The Department remains fully committed to making long overdue reforms to its homelessness assistance programs."

The lawsuits are focused on a policy change that would limit the funding that could be used for permanent housing to 30%, a steep drop from the 90% that had previously been allowed, Politico reported.

Another change would move the majority of the funds to temporary transitional housing assistance and prioritize funding for programs that impose work or service requirements on residents. Federal money would also be prioritized for cities that enforce public camping bans. 

HUD would also be able to withhold funding from programs that help or helped “facilitate racial preferences” or “violate the sex binary in humans,” The New York Times previously reported. In the past, HUD required grant recipients to discuss diversity and gender equality goals. 

Critics of the changes say they threaten existing services that vulnerable Americans rely on and warn the policy shift could push 170,000 households into homelessness. 

HUD is working with less money and fewer staffers than it previously had at its disposal. President Donald Trump's tax package, signed in July, cut $939M in funding for the department.

In the first 10 months of the year, an estimated 23% of HUD staff, about 2,300 workers, voluntarily left. Hundreds more were cut in the fall via layoffs that hit fair housing, public housing and Native American housing arms of the department.