After the Shutdown: What Everyone Needs to Know About the Upcoming NOFO 

Last night, the Senate passed a short-term Continuing Resolution that funds the government through January, allowing the government to re-open and ending a record-long shutdown. We are deeply disappointed to report that the bill does not include the provision that would require the U.S. Department of Housing and Urban Development (HUD) to award eligible Continuum of Care (CoC) Program renewals for 12 months. This bill will now go to the House, which is expected to vote as early as Wednesday afternoon.   

While it is expected that there will be enough votes to pass in the House, keep making those calls to your Representatives!  Part of the agreement in Congress was that the bill including funding for HUD programs will be voted on soon, probably within the next two weeks. This will be an opportunity to increase resources, so the Alliance will be providing tools for advocacy shortly. 

If the House passes the legislation, the shutdown will end and we anticipate that HUD will release the FY2025 CoC Program Notice of Funding Opportunity (NOFO) within days.  

I know it may not feel like it in this moment, but our advocacy did make a difference and Congressional offices are paying attention! Although this path was not successful, the fight will continue.  

Here is what we’re expecting

• Major funding delays. The Alliance anticipates that the application due date for a new CoC Program NOFO will be no sooner than the end of January 2026. That means decisions about awards won’t be made until June at the earliest. With approximately one-third of all current CoC Program awards expiring between January and June 2026, these programs will run out of funds even if they are renewed. This will result in unpaid rent and a significant reduction in services; homelessness in every community will increase once current grants run out of funds. 
• Cap on permanent housing to allow for new project types. As reported by Politico, HUD plans to institute a 30% cap on the amount of funding that can be requested for permanent housing—including Permanent Supportive Housing and Rapid Re-Housing. This will force CoCs to reallocate funding from existing permanent housing projects in order to create new projects, with preference for new Transitional Housing and new Supportive Services Only projects for street outreach.  
• Changes in award process. The Alliance anticipates significant adjustments to funding tiers. Tier 1 will likely be significantly reduced so that a large majority of funding will be subject to CoC score. For reference, in FY2024, Tier 1 was equal to 90% of a CoC’s funding while Tier 2 was equal to only 10%, reflective of the longstanding priority given by HUD and Congress to renewal funding.   
• Penalties for organizations not aligned with administration priorities. The Alliance anticipates that HUD will take a more stringent review of organizations that currently receive CoC Program funding, with penalties for any current or past activities associated with harm reduction practices, the facilitation or promotion of racial preferences, and/or failure to acknowledge the “sex binary in humans.”  Penalties could include anything from reduction in points to outright rejection of specific projects.  
• Sweeping changes to policy priorities and scoring criteria. All indications from HUD and the Administration point to the strong likelihood that HUD will be using the scoring criteria to immediately prioritize funding to CoCs and organizations that align with the July 24, 2025 Executive Order entitled Ending Crime and Disorder on America’s Streets.  
• Redirecting Funds to Preferred Jurisdictions and Organizations. From the Executive Order to the CoC Builds NOFO to communications with specific faith-based networks, the Administration and HUD have overtly signaled their intention to redirect funds. The Alliance anticipates that in addition to new CoC scoring criteria and project threshold requirements, HUD may use the Solo Applicant process to award funds outside of the CoC application process.  

What the Alliance has planned and how you can prepare

Stay tuned for the following items from the Alliance:

• Development of guidance, tools, and strategies to support CoCs with contingency planning and harm mitigation;   
• Conducting a legal analysis of the NOFO; and  
• Activation of new advocacy strategies and tactics.  

It is critical that as a CoC—and as CoCs across your state—you come together to work as a cohesive team. For example, it is imperative that while many of you are focused on all aspects of the CoC Application and planning others are identified to take the lead on advocacy efforts.  

While there is so much uncertainty, here is one thing that I know to be true: over the coming days and weeks, the Alliance will be walking alongside you to navigate what is to come and to fight with all we have against the threats on our collective mission.