What’s Happening?

For years, communities across the country have used federal homelessness funding to keep people stably housed — seniors aging in place, families rebuilding after crisis, veterans managing health needs, and workers priced out by rising rents.

This year, HUD’s 2025 Notice of Funding Opportunity (NOFO) has created uncertainty and raised alarms nationwide. Litigation has slowed the award process, and proposed rule changes would make it harder for communities to protect existing housing that’s working.

Congress has now stepped in. In FY 2026 appropriations, lawmakers increased HUD funding and required HUD to renew expiring Continuum of Care (CoC) projects on a defined schedule if FY 2025 NOFO awards are delayed — a critical move to reduce the risk of sudden, preventable disruption.

What is a NOFO?

A NOFO — Notice of Funding Opportunity — is how HUD sets priorities and decides how federal homelessness funding is allocated through the Continuum of Care program each year. It shapes how much funding communities can expect and the rules they must follow to keep people housed.

Historically, this process has been predictable. Communities plan staffing, leases, and services around clear renewal timelines.

Why is this year different?

Following a court order, HUD temporarily reinstated the FY 2024–2025 NOFO and began processing applications, but HUD has not awarded — and has said it will not award — funding while litigation continues.