UPDATE DEC. 22: Much to my surprise, HUD posted the new CoC NOFO today on grants.gov with a new deadline of Feb. 25. I have not yet had time to determine what changes, if any, are in the new NOFO compared to the rescinded one from Nov. 15. Here’s HUD cryptic note at the top of the grants.gov page: “The Department of Housing and Urban Development (HUD) is issuing this Notice of Funding Opportunity (NOFO) for the 2025 Fiscal Year for public review. HUD understands this NOFO to be enjoined pursuant to a preliminary injunction entered in State of Washington, et al. v. HUD, No. 1:25-cv-00626-MSM-AEM (District of Rhode Island), and National Alliance to End Homelessness, et al. v. HUD, No. 1:25-cv-00636-MSM-AEM (District of Rhode Island). HUD will not implement or enforce this NOFO pending further court order. HUD will issue further clarification on the status of this or any other future Fiscal Year 2025 NOFO as necessary.” I have no idea what this means, but since the litigation is still underway, there may be more modifications coming. Follow this link to download the new NOFO: https://simpler.grants.gov/opportunity/6cc51d68-b70b-4fb4-bdd3-df39b77fc415
UPDATE DEC. 21: As reported by Politico, federal district judge Mary McElroy issued a preliminary injunction restraining HUD from publishing a revised Continuum of Care (CoC) NOFO on Friday Dec. 19. The judge stated in court that “HUD’s November decision to revoke the previous notice of funding and issue a new one that dramatically cut permanent housing grants likely conflicted with requirements under the McKinney-Vento Homeless Assistance Act.” While I’m not a lawyer, I’ve worked with Mekinney-Vento for decades and this decision is a head-scratcher. Emphasizing permanent housing (AKA Housing First) over the traditional approach of treatment, stabilization, and temporary housing is a policy decision. Federal agencies often change policies like this. As us grant writers often say, “the golden rule in grant writing is that the people with the gold make the rules.” In this case, it’s HUD with the gold. Pretty sure this decision will be overturned if HUD decides to appeal, which they likely will. In the meantime, we all wait.
HUD published the FY ’25 Continuum of Care (Care) Notice of Funding Opportunity (NOFO) on November 17. This annual event is usually routine but not this year. The FY ‘25 NOFO was recalled on December 8 to “account for new priorities.” There will be a hearing in the U.S. District Court of Rhode Island this Friday December 19 to consider a coalition of state and local governments and nonprofit housing organizations’ effort to halt significant policy changes to the CoC program reflected in the rescinded NOFO. A CoC is a designed local entity, often affiliated with a city or county, that funds local nonprofits which provide emergency, transitional, and permanent affordable housing, along with supportive services, for persons experiencing homelessness. For background, see this 2022 post we wrote about the CoC program, HUD’s Confusing Continuum of Care Program Explained.
The published FY ’25 CoC NOFO included many changes to the CoC status quo, including:
- A 30% limit on permanent supportive housing funding. Housing advocates claim that permanent supportive housing is best practice in ending homelessness.
- A change is to a set of programs, previously not subject to competition and referred to as “Tier 1.” These were typically renewed without competition and comprised 70% to 90% of local CoC programs. In FY ’25, these are to be fully competitive. HUD maintains that the lack of competition in the local CoC structure has enabled programs that are not effective and/or cannot demonstrate results to continue to receive funding.
- Funding for harm reduction activities is not permitted.
- No nonbinary genders will be recognized. All grant activities are to be delivered to clients who are assumed to be male or female.
- Coordination with law enforcement, particularly through the formal monitoring of immigration status through SAVE, is favored and will receive priority points.
- Client participation in supportive services is required and must be demonstrated through a signed agreement or other mechanism. The new NOFO emphasizes responsibility and self-sufficiency, while housing advocates typically prefer what they refer to as “low-barrier” services, which are those that place as few restrictions as possible on clients in order to house them, after which they can participate in services as they are able. This is often referred to as “housing first.”*
- New permanent supportive housing projects will not be competitive but supportive services only (SSO) projects are encouraged. Still, these SSO projects cannot include rental assistance or housing subsidy provision. Housing advocates contend that offering services with housing assistance in the form of a subsidy is what leads to the greatest decrease in homelessness. HUD, however, finds that offering subsidies without requirements leads to dependence.
The legal challenges state that the published FY ‘25 NOFO is unlawful because it rescinded a prior funding notice just before recent awards were to be distributed. Under the FY ’25 NOFO, awards would not be made until May 2026. This could lead to funding gaps during the coldest part of the winter. Other legal challenges relate to exclusion of nonbinary genders, alleged violations of the Administrative Procedures Act which requires that certain procedures predate a major policy change, and HUD’s failure to meet statutory deadlines that prevent funding lapses. I know this is confusing, but these kinds of lawsuits usually are, which is one reason I never wanted to be a lawyer.
While we’ll all have to wait for the upcoming court hearing to learn what the reissued NOFO may include, HUD Secretary Scott Turner has been very clear in seeking a departure from the CoC status quo, so it’s likely that the new NOFO will be similar to the rescinded one, unless the court takes major action. Stay tuned, as HUD plans to release the revised FY ’25 NOFO in the “coming weeks.”
* As grant writers, we don’t have a dog in this fight, but often write about HUD and affordable housing issues, including this 2022 post, Housing the homeless: the “traditional approach” versus “housing first” for grant writers.