Continuum of Care funding deadline Sept 30

A federal judge ruled on September 16 to restart the Continuum of Care funding process, reinstating a September 30 deadline for applications. The decision surprised housing advocates, who now have just two weeks to complete and submit their proposals for federal grants.

What’s at stake in the funding fight

Nearly $2 billion in multifamily rent payments are at stake. The legal uncertainty stems from proposed changes by the U.S. Department of Housing and Urban Development that would cap funding for permanent supportive housing at 30%. This move could threaten housing stability for as many as 97,000 households. According to the organization Community Solutions, the change would put up to $1.8 billion in annual rental payments at risk.

How the program works and who it serves

The Continuum of Care program governs $4 billion in annual federal spending. It provides funds for cities to support homeless and at-risk populations, including domestic violence survivors and disadvantaged teens. More than 1.2 million beds operate nationwide as part of the program, spanning both transitional and permanent housing. In New York City alone, Continuum of Care funding contributes around $200 million to the city's homelessness response.

Historically, most program funds have gone toward permanent housing. This includes permanent supportive housing and rapid rehousing, which provides rental assistance for up to 24 months alongside services like case management.

Providers scramble amid backlog and uncertainty

Housing providers specializing in sheltering at-risk people are applying for a fresh round of federal funds. They do so while over 1,000 agencies are still waiting for their 2024 funding. Delays from last year's appropriation continue to create uncertainty, as only about 5,300 of the roughly 6,400 grants meant to be renewed have been fully executed.

Georgi Banna of an unspecified organization highlighted the difficulty, stating, "Because of the new program rules, they may not know exactly what they're anticipating to get based on their applications." Many states are trying to figure out how to backstop lost funding to keep people in their homes, but they often have limited pools of money from which to draw.

The program has been tied up in court since last year over the proposed changes. More than a dozen states filed suit after the 2025 notice of funding opportunity was released in November. A judge had halted the funding process, forcing developers and providers to find stopgaps for lost money. The 2024 funding cycle was also held up in court, until Congress stepped in and required HUD to renew all existing grants.

Broader market impacts of funding instability

Continuum of Care programs are not only social service infrastructure. The rent payments they provide are a stabilizing force in multifamily property operations. Changes to HUD's funding structure can mean landlords whose properties serve as shelter under the program will not get their rent checks as expected or may see vacancy spikes.

Long term, the uncertainty can impact how lenders view these properties. This may result in less favorable loan terms or a complete withdrawal of financing. Across the country, these federal dollars support thousands of leases in the private market. They fund rapid rehousing tenants in Class-B and C multifamily buildings and support operators like Breaking Ground in New York, Downtown Emergency Service Center in Seattle, and Mercy Housing nationally.

Housing providers must complete their applications by the September 30 deadline amid ongoing litigation that could still change the funding process.