According to a statement from the U.S. Department of Housing and Urban Development (HUD), the administration believes this approach will increase accountability and encourage independence — targeting what it perceives to be the underlying drivers of homelessness.
“These long-overdue reforms will promote independence and ensure we are supporting means-tested approaches to carry out the President’s mandate, connect Americans with the help they need and make our cities and towns beautiful and safe,” HUD Secretary Scott Turner said in a release.
Turner also announced $3.9 billion in competitive grant funding for the program.
HUD’S Continuum of Care — the nation’s largest initiative to house people experiencing homelessness —has previously devoted 87% of its budget to permanent housing.
HUD staffers and others familiar with the plan — who spoke with Politico in September on condition of anonymity — warned that proposed cuts could put more than 170,000 people at risk of returning to shelters or the streets.
Tight grant window
Politico reported Friday that the upcoming Continuum of Care grant application window is set to close Jan. 14 — weeks before Congress decides HUD’s budget.
Because current project grants will lapse before new awards are issued, some permanent housing programs could lose all funding and displace residents during the coldest months, a HUD employee said.
With awards not expected until May 1, many programs could reportedly face a funding gap through early 2026.
Roughly one-third of all grants expire between January and June 2026, meaning many projects will run out of money well before new funds arrive, according to the National Alliance to End Homelessness.
Bipartisan opposition
Forty-two Senate Democrats urged Turner to change course and renew fiscal year 2025 Continuum of Care grants in a Thursday letter.
“HUD must immediately reconsider these harmful and potentially illegal changes that could result in nearly 200,000 older adults, chronically homeless Americans with disabilities, veterans, and families being forced back onto the streets,” the Senators wrote. “As Secretary, you have the authority to avoid this worst-case scenario by carrying out the previously planned and Congressionally authorized two-year NOFO, and we strongly urge you to do so expeditiously.”
In October, more than 20 House Republicans wrote to Turner, also urging HUD to renew grants and advising that policy changes “should be implemented carefully to avoid destabilizing programs that serve individuals with severe disabilities related to mental illness, chronic health conditions, or substance use disorders, as well as seniors with disabilities.”