Homelessness Executive Order Prompts Sweeping Changes
As agencies interpret the recent Executive Order, HUD overhauls Continuum of Care homelessness program.
Trump's recent Executive Order on homelessness and public safety, Ending Crime and Disorder on America's Streets, is prompting regulatory changes from the Departments of Housing and Urban Development (HUD), Health and Human Services (HHS), and Justice (DOJ) related to existing programs and funding related to homelessness.
As agencies maintain broad discretion over program rules and determine how to align with the EO's new guidance, HUD is preparing to make significant changes to how funding for a key homelessness program will be allocated.
HUD Shifts Funding Toward Transitional Housing
The HUD plan will overhaul the Continuum of Care (CoC) program and shift resources away from permanent housing assistance and into transitional housing support with requirements for work or service. The change in funding allocation will be significant. Currently, CoC spends nearly 90 percent of its funding on permanent housing, but under the new approach, that would drop to about 30 percent.
Overall funding levels would remain the same, but permanent housing would see a shift in its allocation from $3.3 billion to $1.1 billion. The Fiscal Year 2026 budget submitted to Congress by the Trump administration called for the elimination of the CoC program, but key Congressional committees have rejected that approach in recent action on the bill. Final action on the FY26 HUD budget is still pending on Capitol Hill.
Although full details of the policy and funding changes for CoC have not yet been made public, a HUD official told Politico in response to questions about the new approach, "HUD is no longer in the business of permanently funding homelessness without measuring program success at promoting recovery and self-sufficiency. There will be more news on this much-needed paradigm shift soon."
A new funding cap for permanent housing assistance through the CoC program is expected to be announced in a forthcoming Notice of Funding Availability for the program. Additional changes may include policies deducting points in the competitive process for accessing grants for organizations that use racial preferences or equity-related policies.
The new approach will likely bring swift and significant consequences to local homelessness programs, agencies, and organizations. Organizations or local governments relying on federal funds would face the choice of rapidly changing their approach to permanent housing or finding other ways to fund those activities.
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