Trump Administration Releases CoC Funding Notice Drastically Cutting Funding for Permanent Housing and Putting 170,000 People At Risk of Homelessness

The Trump administration released on November 13 the Fiscal Year (FY) 2025 Continuum of Care (CoC) Notice of Funding Opportunity (NOFO), making drastic, harmful changes to how the federal government funds homelessness assistance programs. The new policy outlined in the NOFO slashes support for permanent housing programs by more than half, putting as many as 170,000 people who rely on CoC assistance for stable, affordable housing at risk of returning to homelessness. NLIHC condemns the administration’s policy changes, which will quickly upend homelessness response systems throughout the country and increase homelessness. 

The CoC program is the largest source of federal funding for homelessness assistance, with an annual budget of about $3.5 billion. CoC funds serve over 750,000 people experiencing homelessness each year, including older adults, people with disabilities, veterans, and families with children. 

Currently, approximately 87% of CoC funds are allocated to permanent housing, including permanent supportive housing and rapid rehousing, proven solutions to homelessness that pair housing with voluntary supportive services to help individuals find and maintain a safe, stable home. The NOFO limits how much CoC funding communities can spend on permanent housing to 30%, which the National Alliance to End Homelessness (the Alliance) warns will force communities to reallocate funds from permanent housing programs to less effective programs, like high-barrier transitional housing, emergency shelter, or new Supportive Services Only projects.   

The NOFO’s scoring criteria have also been changed to prioritize funding for CoCs and organizations that align with President Trump’s Executive Order (EO), Ending Crime and Disorder on America’s Streets. NLIHC previously condemned the EO, which calls for harmful and ineffective policies and practices for addressing homelessness, including mandated services, work requirements, and camping bans. In addition, the NOFO notes HUD “reserves the right to verify past performance” of an applicant, and to “evaluate the eligibility of a project application” if the project utilizes or has utilized in the past harm reduction practices like safe injection sites; facilitated or promoted racial preferences; or “[conducted] activities that rely on or otherwise use a definition of sex other than as binary in humans.”    

Additionally, because the NOFO is being released so late in the CoC funding cycle, the Alliance warns that there will be significant funding gaps and delays, which may put program participants at risk of eviction and homelessness. The application due date for the NOFO is January 14, and the anticipated award date is May 1. Approximately one-third of current CoC awards are set to expire between January and June 2026, which means that even if funding for these programs is renewed, the CoCs will still run out of money. These delays will result in a significant reduction in services, and homelessness is expected to increase once current grants are exhausted. 

The Trump administration’s EO and these changes to the CoC program signal a fundamental shift in federal homelessness policy away from effective, humane approaches and toward wasteful cruelty and criminalization. Research has consistently shown that providing permanent housing and voluntary services to people experiencing homelessness decreases homelessness and improves housing stability more efficiently and effectively than high-barrier, treatment-first approaches. Evidence from a systematic review of 26 studies indicates that this approach resulted in an 88% decrease in homelessness and a 41% improvement in housing stability compared to a “treatment first” approach, where individuals were required to accept services in exchange for housing. 

Moreover, this administration’s actions threaten to distract from real solutions to the affordable housing and homelessness crisis: long-term, large-scale investments in the programs and policies that help people find and maintain safe, stable, affordable housing. To end homelessness and housing poverty, the administration and Congress must ensure rental assistance is universally available to all eligible households, expand the supply of affordable, accessible, and available housing for people with the lowest incomes, and ensure critical services are available and accessible.  

The NOFO is available here.  

Read POLITICO’s reporting about the NOFO here.