More than $4 billion in grant funding is on the table for community-based programs that aim to reduce homelessness and provide supportive services, such as mental health and addiction treatment, for the unhoused.
The Department of Housing and Urban Development (HUD) announced the grant opportunity on June 1 for its continuum of care (CoC) program to curb homelessness. HUD anticipates awarding up to 7,000 grants, valued at $2,500 to $25 million per initiative. The agency described the grant opportunity as the “most competitive funding opportunity in the history of the CoC program.”
Applicants in the mental health and addiction treatment field must demonstrate to HUD that their projects are integrated into local behavioral health systems and recovery-oriented. New projects must go beyond case management and show multiple levels of care for both mental health and addiction treatment, not just referral partnerships.
Additionally, programs must show that participants are engaged in care or treatment for at least 20 hours per week with individualized wellness goals. Programs must also have at least one formal partnership with a community mental health center or a certified community behavioral health clinic, according to supporting grant application documents.
Programs and projects that can link outcomes around mental health and addiction care to employment, exits to unsubsidized housing and lower rates of individuals who return to homelessness will receive priority funding. There is also an emphasis on steering funding toward treatment-focused beds, recovery housing and sober living environments.
It’s a shift away from the federal Housing First initiative, which HUD announced last year it would end the practice of automatic renewal for 90% of Housing First-funded projects for failing to produce results. The move came as President Donald Trump signed an executive order to reduce crime and redirect funding to transitional housing and other services for this population.
The new $4.04 billion grant effort builds upon previous homelessness prevention and drug policy efforts put forth by the Trump administration that have typically followed more of a law-and-order theme than some past administrations. HUD Secretary Scott Turner criticized the country’s legacy homelessness reduction effort, Housing First, which the new initiative aims to overhaul.
“The ‘housing first’ experiment failed Americans by warehousing the vulnerable without results. This ideology promised to end homelessness,” Turner stated in a HUD press release announcing the new initiative. “Instead, billions of taxpayer dollars were spent while homelessness increased to record levels. Housing alone will not solve a crisis driven by addiction and mental illness. Under President Trump’s leadership, HUD is making necessary reforms to put recovery first.”
The Housing First initiative, first developed in 1990, is an evidence-based model that prioritizes providing housing to the unhoused without contingencies on sobriety or mental health treatment, etc., and thereafter introduces support like harm reduction and other treatment systems, which the Trump administration has not been keen on continuing. Opponents of the Housing First model have cited the model as solving only housing, rather than accompanying issues like addiction and actually increasing homelessness overall.
But data from the National Alliance to End Homelessness shows that from 2007-2016, homelessness across the U.S. decreased by 15%, with veteran homelessness decreasing by 47% and family homelessness decreasing by 23% within the same period. This was after Housing First was adopted as a federal strategy in the late 2000s and received funding and program support from the HUD’s continuum of care program and the Department of Veterans Affairs.
Nationwide homelessness also went down 3.3% between 2024 and 2025, according to HUD data.
The HUD’s latest proposal to address homelessness and the addiction crisis is a watered-down version of the previous plan, which a Rhode Island judge blocked last year after advocacy groups warned the plan could lead to 170,000 individuals who previously experienced homelessness back on the street.
The latest policy shift aims to increase competition for grant money with results-driven reduction data and imposes a cap on the share of funding that can go toward permanent housing projects.
“This ends a lack of program accountability that has led to waste, fraud, and abuse instead of providing assistance to homeless individuals,” the press release states.
The application period for the grants closes August 26.