January 28, 2026
Updated January 28, 2026
Federal policy affecting homelessness funding has continued to evolve in early 2026. In late 2025, the U.S. Department of Housing and Urban Development (HUD) proposed major changes to how federal homelessness assistance funds would be distributed through the Continuum of Care (CoC) Program — the largest source of federal support for communities addressing homelessness. However, a federal judge has since blocked those proposed changes and restored prior funding guidance while litigation proceeds.
Proposed HUD funding overhaul: In November 2025, HUD issued a new Notice of Funding Opportunity (NOFO) that would have altered how more than $3 billion in CoC funds were distributed, including limits on spending for permanent housing solutions and new compliance conditions.
Legal challenge and court ruling: In response, a coalition of states, local governments, nonprofit organizations, and housing advocates sued HUD, arguing the changes conflicted with longstanding federal law and congressional intent for homelessness funding. On December 19, 2025, a federal judge issued a preliminary injunction blocking HUD’s attempt to implement the new funding notice. The judge ordered HUD to revert to the original Continuum of Care program rules pending a final decision — effectively pausing the proposed overhaul.
Reinstatement of prior NOFO: Following that court order, HUD reinstated the previous Continuum of Care NOFO for FY 2024–2025, ensuring ongoing continuity in eligibility and renewal criteria while the litigation continues.
The CoC Program is critical to homelessness response systems across the country. It funds:
Because of the judge’s ruling, current CoC funding rules remain in effect, and providers eligible for renewal can expect to continue operating under that framework. This pause protects funding for proven, housing-focused interventions that prioritize long-term stability and have been shown to reduce homelessness.
However, the litigation is ongoing, and final outcomes are still pending. HUD continues to work within the court’s constraints, and any future policy changes could depend on future court decisions.
For communities like ours, where homelessness extends beyond Columbus and affects neighboring counties, continuity in federal homelessness funding is essential to sustaining services and keeping vulnerable neighbors housed. Stable Continuum of Care funding supports the housing-first strategies that reduce homelessness and promote long-term stability for families, individuals, veterans, seniors, and people with disabilities.
CSB and partners will continue to monitor federal developments and share updates that may affect homelessness funding and service delivery.
Community Shelter Board remains vigilant in tracking federal policy developments and advocating for consistent, predictable funding for solutions that work. We will update this page with relevant announcements as the situation evolves.