HUD Grant Delays and Planned Staff Cuts Are Sending Homeless Service Providers into Panic

Every year, the Department of Housing and Urban Development awards billions of dollars in grants to nonprofits and state and local agencies to help people transition from homelessness into permanent housing. In fiscal year 2024, Congress approved and the Biden administration awarded $3.6 billion of those competitive grants, which also include funds for veterans experiencing homelessness, rapid rehousing and permanent supportive housing, youth homelessness and domestic violence shelters.

The money was set to go out throughout 2025 and 2026, depending on when individual grants were set to renew. But nonprofit leaders say none of the grant funds awarded on Jan. 17 have officially been made available.

While it’s not clear how much money was supposed to have gone out since January — that depends on each agency or nonprofit’s grant schedules — nonprofit leaders tell Shelterforce/Next City that the Trump administration’s HUD has not yet communicated about the grant funds. It’s leaving some providers to panic about how they will serve homeless communities at a time when homelessness has reached an all-time high: more than 770,000 people were homeless on a single night in 2024, according to HUD’s annual Point-in-Time count.

“My real worry is that very soon we’ll start to see homeless service agencies that go belly up, and there will be formerly homeless people that are served by these programs who are getting forced back onto the streets,” says Shamus Roller, executive director of the National Housing Law Project.

If you work with HUD, have knowledge about the Trump administration’s HUD policies, or are a service provider whose federal funding has been delayed by the Trump administration, please reach out to housing@nextcity.org using a secure device.

While the Biden administration formally announced the grantees as one of its final acts in office, the Trump administration must formally obligate the funds through award letters and grant agreements, according to a former HUD official with knowledge of the matter. That has not happened yet.

On Jan. 27, the Trump administration’s Office of Management and Budget announced an across-the-board grant freeze. That grant freeze was paused by a federal judge on Jan. 28, but the administration has continued to withhold funding, despite its legal obligation to disburse it. The HUD funds would fall under the purview of the court order, which means restricting the funds is illegal, the former HUD official said.

Together with rescinded job offers and plans for widespread terminations, the cuts to HUD could threaten the basic functions of the agency, which directs the federal government’s homelessness response, manages public housing and regulates federally-subsidized housing.

‘Never experienced anything like this’

Every year the federal government creates a “Notice of Funding Opportunity” for HUD’s billions in grant funding for the Continuum of Care program, through which local communities apply for funding through a shared application to better coordinate funding. Many of the grants are renewals for existing programs, and in many cases, the funds keep nonprofits afloat.

“Everybody’s waiting for funding, and there are some programs that have already spent down their previous allocation,” says Roller, who ran a Continuum of Care provider before joining NHLP. He says the grant freeze is a real threat to the existence of these agencies and the services they provide.

The press release announcing the grant awards was removed from HUD’s website after the Trump administration took over, and the page now generates an error. (Documents listing grant recipients by state are still accessible on HUD’s website as of this writing.)

The Jan. 17 press release said that 400 different communities applied through their Continuums of Care, and that 7,000 different programs received funding through various nonprofits, states, tribes and local governments. The Biden administration said the awards would “include explicit funding for youth and survivors of domestic violence, dating violence, sexual assault, and stalking.”

Eric Samuels, CEO of the Texas Homeless Network, says the nonprofit partners with hundreds of other nonprofits across the state and that the delay in receiving award letters is causing stress and anxiety that services for people experiencing homelessness will have to end.

Samuels says the organization gets three major grants from HUD, one of which is set to renew this week. The grant was among those announced by Biden’s HUD in January.

He says that in a typical year, the nonprofit would have received an award letter from HUD by now, but as of late February they still haven’t received it. The grant helps Texas Homeless Network compile detailed lists of people experiencing homelessness in the community so that it can better target resources. Samuels says the nonprofit is fortunate to have enough reserve funding that the data collection will continue, but other organizations may not be so fortunate.

“I fear that if this delay continues through the next month, we will start hearing about [disruptions in operations],” Samuels says. “A lot of these small nonprofits do not have reserve funding, or they may borrow money, get loans to continue, which is a very dangerous proposition, or they just suspend operations for a while.”

He says it’s typical for HUD contracts to be signed a month into a project, which means nonprofits often have to foot the bill for the first few weeks before being reimbursed. But he says there’s usually communication from HUD regional offices. In his case, Samuels says the regional office has not been communicating.

Camille Castillo is director of the El Paso Coalition for the Homeless. She says the agency gets three grants from HUD’s Continuum of Care program. One of the grants is supposed to renew at the end of March, but with no communication from HUD about award letters, she’s nervous that they won’t have money for those operations. Ironically, the grant in question is for Homeless Management Information System, federally required data collection that all Continuum of Care programs are required to administer.

“I’ve been working with this agency for 20 years and never have experienced anything like this before,” Castillo says of funding not arriving.

Another grant that wasn’t set to renew until later this year pays for staff that makes intake calls and referrals for people at risk of homelessness. If the funds don’t arrive, she says, they’ll have to lay off staff and won’t be able to field the 1,200-1,500 calls a month they receive in El Paso County.

“It’s sad on so many levels,” Castillo says.

Funding breakdown

HUD grants play a large role in keeping people housed and in rehousing people experiencing homelessness in all 50 states. Over $200 million in grants are meant to go to the LA area alone, according to a press release from the Los Angeles Homeless Services Authority. That includes $85 million for the Housing Authority of the City of Los Angeles, $47 million for the Los Angeles County Development Authority (LACDA), and $77 million for the LA Homeless Services Authority. It includes $33 million for the County of Santa Clara.

In New York, it includes $3.7 million for NYC’s Department of Homeless Services and $54 million for the Department of Housing Preservation and Development. Millions more are meant to go to nonprofits like CARES of NY, Domestic Violence and Rape Crisis Services of Saratoga County, BronxWorks and Housing Works.

In Texas, the funds include $10.9 for the Coalition for the Homeless in Houston, a nonprofit that is integral to the city’s well-received homeless response.

Next City/Shelterforce reached out to HUD but had not received a response by the time of publication.

A LACDA spokesperson said the agency had not yet received a notice of funding award for the grant funds, but that they typically don’t receive their award until the early spring. A spokesperson for Coalition for the Homeless Houston did not specify if it was awaiting an award letter but said, “The more immediate impacts will likely be on smaller Continuums of Care (CoC) throughout our state.”

Gutting HUD’s workforce

The lack of communication and delay in awarding grant funds comes as the “Department of Government Efficiency” taskforce has been threatening across-the-board cuts to HUD.

The head of a union that represents HUD employees told Bloomberg Law the Trump administration was planning to terminate 50% of HUD’s workforce, including in departments that enforce civil rights law and rebuild after disasters. HUD’s current workforce consists of 9,600 employees. Experts say such cuts would slow the agency’s operations to a standstill, make it more difficult for Section 8 and other vouchers to be disbursed, and could eventually lead to loan defaults that impact the larger housing market.

On Feb. 20, the New York Times reported that the Trump administration plans to cut the staff of HUD’s Office of Community Planning and Development, which handles disaster recovery, affordable housing, community development and homelessness through the Continuum of Care program. Staff would shrink from 936 to 150 employees, which would significantly impact grant disbursement.

And these staff cuts have already begun. A housing advocate told Next City/Shelterforce that the newest HUD Honors attorneys — law students who work at HUD and are often hired after their internship term — have been rescinded. And the Trump administration says it has already fired thousands of “probationary” employees across the federal government, which include both new hires and newly promoted employees, some of whom have decades of service.

“It’s hard to imagine HUD functioning at all with the cuts that they propose,” Roller says.

In a Feb. 16 letter to HUD Secretary Scott Turner condemning the cut, a group of Democratic senators pointed out that HUD’s staffing levels had already dropped by 20% between 2012 and 2019. As a result, the senators wrote, HUD did not have enough staff to approve applications for new housing, to respond to disasters or to meet legal obligations under the Fair Housing Act.

Congress passed bills to increase HUD’s staffing to 2012 levels, the letter notes, but the Trump administration has already undone this work by firing “probationary” employees and with a deferred resignation program, which pays employees to stay home for months, then exit the federal workforce. The letter includes questions for the HUD secretary, including how many probationary employees were terminated and whether a reason was provided when terminating employees for performance, as required by law.

Frank Woodruff, executive director of the Community Opportunity Alliance, says the staff cuts could further slow down funding for grants.

“It’s a lot of money to get out the door, and there’s a lot of back and forth that happens,” Woodruff says. He says that it would take a lot longer to process waivers, which local housing agencies use to bypass red tape and access flexible HUD funding. Woodruff says that it will also reduce oversight leading to misplaced funds.

“I think there’s a greater probability that mistakes in how funds are used won’t get caught, and there’s a greater potential for fraud and abuse,” Woodruff says. He says fewer staff would make it more difficult to finance affordable housing projects, which often rely on HUD certifications of voucher holders who are potential applicants to qualify for financing.

On Feb. 13, HUD officially announced its own “DOGE” taskforce, which it said will be staffed by HUD employees.

Separately, on Feb. 14, DOGE claimed it had recovered $1.9 billion in “misplaced” HUD funds, releasing sensitive taxpayer information in the process. The claim quickly took off in conservative media with little explanation or scrutiny of the group’s claims. Despite DOGE’s claims, there’s no evidence that the funds were misplaced. According to NOTUS, the contracts were for companies servicing mortgage loans. One of the companies, Carrington Mortgage Services, says it refinances loans, including Federal Housing Administration loans.

In a statement to Next City/Shelterforce, Carrington said that the funds were never spent and remained with HUD. This would mean the funds could have been spent on other services, including homeless services, rather than returned to the Treasury.

“We believe what DOGE discovered was money that was allocated to Carrington under a previous, expired contract to meet servicing obligations,” Carrington says. “This budgeted allocation was never used by us in undertaking our contracted duties. Contrary to any assertions of waste of U.S. Government funds, these amounts actually represent a savings of Government funds by not utilizing all available funding related to the services performed under the contract.”

In an appearance on the Charlie Kirk show, Turner claimed the agency had eliminated $260 million in wasted funds and said that he was moving to get rid of the Affirmatively Furthering Fair Housing rule. The provision, part of the Fair Housing Act, requires the government to proactively desegregate communities. The provision was mostly unrealized until an Obama-era HUD rule required local governments to provide plans on how they would enact this unrealized goal of fair housing law. The rule was undone during the first Trump administration and brought back under the Biden administration.

Roller says that proposed cuts to HUD’s fair housing staff are among the most disturbing. “They’re opening the doors for having discrimination across the board if HUD’s not doing their work around this,” he says.

According to the National Fair Housing Alliance, private and public fair housing organizations received 34,150 fair housing complaints received by nonprofits, HUD and the Department of Justice in 2023, an increase from 33,007 complaints in 2022. Over half the complaints related to discrimination on the basis of disability.

The attacks on fair housing are a familiar tactic by the president, who first gained nationwide media attention in 1973 when the federal government sued him and his father for allegedly excluding Black applicants from their properties.

Samuels stresses that the grants are for government contracts tied to specific roles helping house people. “In a lot of cases, they’re essential services to a community. They’re keeping people alive in a lot of cases, especially when you have weather like we have right now across the country,” Samuels says.