HUD Withdraws Major Homelessness Funding Shift After Widespread Pushback

Monday afternoon, HUD abruptly withdrew its FY2025 Continuum of Care (CoC) Notice of Funding Opportunity (NOFO) just 90 minutes before a federal court hearing. The proposal included significant changes that would have capped permanent housing funding at 30 percent — down from the current national average of 87 percent — and imposed requirements that prioritized temporary housing and compliance-based services. The NOFO also included restrictions affecting organizations affirming transgender or nonbinary individuals.

For many communities, the impact would have been immediate and severe. According to the National Alliance to End Homelessness, in Ohio alone, where CoCs currently allocate between 82 percent and 92 percent of funding to permanent housing, the cap would have resulted in an estimated $103.5 million loss in renewal funding and put housing and services for roughly 13,000 people at risk.

HUD’s decision to withdraw the NOFO followed:

• Legal action by 21 attorneys general and a coalition of local governments and nonprofit organizations.

• A national response effort led by the National Alliance to End Homelessness and partners.

• Growing bipartisan concern among federal lawmakers following sustained outreach from communities across the country.

HUD has stated it will reissue the NOFO “as quickly as possible” with technical corrections, but the timing and scope remain unclear..

At ACS, we are encouraged by what this development underscores: public policy is movable when communities speak with urgency, clarity, and collective alignment. The response from the field helped create pressure that federal decision makers could not ignore.

While this is not the final outcome, it is a meaningful step. ACS will continue tracking updates, and we will share additional guidance as more information becomes available.

This moment reinforces what we see every day in our work with dedicated leaders across the country: Advocacy works.