Trump Admin Looks At Deep Cuts To Homeless Housing Program

The Trump administration is expected to dramatically cut funding for a permanent housing program — a move that could potentially reexpose tens of thousands of people to homelessness.

More than half of the 2026 funding for the Department of Housing and Urban Development’s homelessness program designated for permanent housing projects will be cut and moved to transitional housing assistance with some work or service requirements, according to three HUD employees and a person with inside knowledge of the Continuum of Care program as well as internal HUD documents obtained by POLITICO confirming the cuts. All the people were granted anonymity to discuss sensitive matters.

The funding cuts could put more than 170,000 people at risk of experiencing homelessness, according to the internal documentation and the people.

“When the subsidy and the support that goes along with those subsidies is removed, it puts people at grave risk," said the person with inside knowledge of the CoC program. “And most of these folks without these supports will likely end up back in emergency shelters or back on our nation's streets.”

The program partners with communities to provide housing and services to sheltered and unsheltered people with the goal of moving them into permanent housing. It often benefits families with children, and those who have experienced homelessness in the past in combination with being chronically ill or having a disability. The cuts could have a greater impact on rural areas that have less access to city and state dollars to supplement federal funding, the people said.

“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,” said a HUD spokesperson.

The change to the policy is the latest example of how the Trump administration is placing new rules on government benefits, often requiring work or other requirements for people seeking to tap federal subsidies. But those close to the program say the new policy could have severe repercussions, leaving those utilizing these services in a more dire situation if they have young children at home or are unable to work for a reason not recognized by the government as an exemption.

Currently, 87 percent of all CoC program funds ending in 2026 are slated to support permanent housing in some capacity. Under the policy change, only 30 percent of the funds will be allowed to be used for that purpose.

The available funding for permanent housing for calendar year 2026 is currently at $3.3 billion, but would be cut to less than half of that at around $1.1 billion once the policy change is implemented, according to the internal HUD data. Additionally, President Donald Trump’s budget for fiscal 2026 proposed cutting funding to the entire CoC program.

The funding cap, which is expected to be introduced through a Notice of Funding Opportunity in the coming weeks, is considered “the worst-case scenario” and will be “devastating,” the people said.

Typically, any change like this would go through HUD’s attorneys to ensure it complied with the McKinney-Vento Homeless Assistance Act, which created the program. The law requires the CoC program to work, primarily at a local level, to end homelessness and requires both renewable and nonrenewable funding to provide a variety of housing resources, including permanent housing, primarily for families and those with disabilities.

However, two of the HUD employees said they were forbidden from speaking with the agency’s attorneys, and there is concern that the funding cap raises legal questions about its compliance with the law.

“We had no indication that there would be anything like this and no indication that the program would be administered this irresponsibly. We just did not see this coming,” one of the HUD employees said.

Additionally, those administering the programs through local organizations have been left in the dark, as two HUD employees said they were not allowed to share any details about the expected policy change.

The new criteria will also deduct points for projects if the organization applying for federal funding has previously used racial preferences or recognized transgender people.