The U.S. Department of Housing and Urban Development (HUD) remains temporarily blocked from implementing major changes to the FY 2025 Continuum of Care (CoC) program that would have sharply limited investments in permanent supportive housing.
In November, HUD issued a revised FY 2025 CoC Notice of Funding Opportunity (NOFO) that would have capped permanent supportive housing investments at 30 percent—reversing long-standing federal policy. After multiple lawsuits were filed by states, local governments, and national housing organizations, HUD withdrew the NOFO in December.
For background and Texas-specific impact analysis, see TAAHP’s earlier article: HUD Pauses Major Homelessness Funding Changes After Lawsuits.
Court Action Keeps Existing Rules in Place—for Now
On December 23, a federal district court ordered HUD to prepare to process Permanent Supportive Housing (PSH) renewals under the original FY 2024–25 NOFO. While the court did not require HUD to immediately obligate funds, the order ensures the agency can move quickly if plaintiffs prevail.
HUD confirmed on January 8 that it will comply with the order and reinstate the FY 2024–25 NOFO while litigation continues. Applications opened January 9 and are due February 9, 2026.
HUD has also acknowledged that the revised FY 2025 NOFO reissued on December 19 is currently enjoined and will not be implemented unless the court allows it. The application portal for that NOFO remains closed.
Why This Matters for Texas Providers
Texas Continuums of Care rely heavily on Permanent Supportive Housing and Rapid Rehousing, with most dedicating more than 80 percent of CoC funding to permanent housing. Any future attempt to reinstate a permanent housing cap would disproportionately affect Texas communities and destabilize existing housing capacity.
National modeling previously estimated Texas could lose more than $114 million in CoC funding and nearly 9,700 permanent housing beds under the revised policy. Those impacts are paused—but not resolved.
What to Do Now
• Proceed under the FY 2024–25 NOFO while it remains in effect.
• Monitor PSH contract expirations closely.
• Plan for continued uncertainty as litigation and potential appeals move forward.
TAAHP Monitoring
TAAHP will continue tracking the litigation, HUD guidance, and congressional activity related to CoC funding and will keep members informed as clarity emerges.