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HUD Rewrites Homelessness Grants, Capping Permanent Housing and Conditioning Aid on Treatment and Work

A new $3.9 billion funding notice limits long-term housing to 30% and ties eligibility to encampment enforcement and ICE cooperation, prompting warnings of early‑2026 funding gaps.

Overview

  • HUD’s Continuum of Care notice prioritizes short-term, transitional programs that require treatment or employment and support clearing encampments, shifting away from long-standing Housing First renewals.
  • The application window closes Jan. 14 with awards not expected until around May 1, creating a potential months‑long lapse for projects whose current grants expire between January and June 2026.
  • New criteria in the notice include cooperation with ICE, enforcement of public camping and drug-use bans, adherence to involuntary commitment standards, and restrictions on applicants who deny a sex binary or distribute drug paraphernalia under harm reduction.
  • Forty-two Senate Democrats urged Secretary Scott Turner to reverse course and renew existing grants, while more than 20 House Republicans asked HUD to prevent disruptions by extending current awards.
  • Providers and state coalitions report steep cuts to permanent supportive housing in places such as Minnesota, Los Angeles, Orlando and Connecticut, warning that as many as 170,000 to nearly 200,000 people—many seniors and individuals with disabilities—could lose housing, even as HUD defends the shift as accountability-focused.