Trump administration plans deep cuts to homeless housing program

The Trump administration is preparing to slash funding for permanent housing programs aimed at addressing homelessness and shifting billions toward transitional housing that requires work or service participation, according to a report from Politico.

The Department of Housing and Urban Development’s (HUD) Continuum of Care program — the nation’s largest initiative to house people experiencing homelessness — currently devotes about 87% of its budget to permanent housing.

Under a pending policy change, that figure would fall to about 30%, with available funding cut from $3.3 billion to around $1.1 billion in 2026, the report said.

HUD staffers and others familiar with the plan — who spoke with Politico on condition of anonymity because they were not authorized to discuss the matter — warned that the cuts could put more than 170,000 people at risk of returning to shelters or the streets.

Families with children, people with chronic illnesses and those with disabilities are among the most likely to be affected. Rural areas, which rely heavily on federal support, could be hit hardest, the report added.

“When the subsidy and the support that goes along with it is removed, it puts people at grave risk,” one person with direct knowledge of the program said.

Those who spoke with Politico characterized the moves as “devastating” and a “worst-case scenario.”

HUD’s comments on cuts

HUD confirmed the policy shift to Politico, framing it as a change in philosophy.

“HUD is no longer in the business of permanently funding homelessness without measuring program success at promoting recovery and self-sufficiency,” a spokesperson said.

Legality and consequences

Internal concerns are mounting over the policy’s legality, Politico said.

Two HUD employees said they were barred from consulting agency attorneys — raising questions about whether the change complies with the McKinney-Vento Homeless Assistance Act. That legislation created the Continuum of Care program to end homelessness through a mix of housing resources.

Earlier this year, HUD Secretary Scott Turner stated he’d be open to withholding federal funds from cities that fail to show progress in dealing with homelessness.

Local housing providers, meanwhile, have reportedly been left without guidance.

HUD employees said they were instructed not to brief community partners on the forthcoming cuts, which are expected to be detailed in a Notice of Funding Opportunity within weeks.

The policy would also penalize applicants that previously used racial preferences or recognized transgender people in their programs, according to internal HUD documents.