The Department of Housing and Urban Development (HUD) announced on Nov. 13, 2025, that it would overhaul its Continuum of Care (CoC) Notice of Funding Opportunity, the largest source of federal funding for homelessness assistance. The administration intended to redirect grant allocations from permanent to transitional housing programs, but temporarily retracted its statement on Jan. 9 after a federal court injunction.

Since 2015, unsheltered and overall homelessness in Maryland decreased by 42% and 25%, respectively, largely through housing-first practices that immediately provide permanent housing without sobriety requirements. Jake Day, secretary of the Maryland Department of Housing and Community Development, said the proposed funding change could cut $46 million from such programs, possibly overturning the decline in homelessness.

“The Trump administration’s decision will directly result in a 25% spike in homelessness across Maryland,” Day said in a statement to Capital News Service. “It will reverse decades of progress to reduce unsheltered homelessness.”

CoC funds efforts to combat homelessness by nonprofits and state and local governments, aiding over 750,000 people annually with a budget of $3.5 billion. Currently, 87% of CoC competitive grants go toward permanent housing. HUD originally aimed to cap this number at 30%, potentially putting vulnerable populations, like individuals over 65, those with disabilities or young children, at risk of losing stable housing.

The intended changes prioritized short-term transitional housing, which is a time-limited supportive living arrangement usually lasting six months to two years. These programs offer counseling and job training to help people become self-sufficient, but include stricter requirements such as mandatory sobriety, curfews and background checks. In a study from the American Journal of Public Health, participants receiving immediate housing without treatment prerequisites remained stably housed more often than participants receiving housing contingent on sobriety.

The Montgomery County Coalition for the Homeless provides emergency shelters and permanent housing to help end homelessness in the county. Melanie Hatter, the senior officer of communications, grants and advocacy, said 97% of their permanent supportive housing clients don’t return to homelessness. Hatter said the organization’s programs would be at risk of shutting down if the new funding version followed through.

“A safe, stable home is the foundation for everything else, including good health, employment, school success and hope,” Hatter said. “[Permanent supportive housing] has been essential to people with disabilities maintaining housing stability and enabling access to care.”

Permanent supportive housing provides rental assistance outside of a specific time frame, with participants usually paying around 30% of their income for rent. These options offer voluntary support services to address complex needs like mental illness or substance abuse, allowing individuals to consciously choose to get help without the pressure of losing housing.

Montgomery County receives around $12 million annually and would lose $8.3 million for rental and leasing assistance if the changes occur. Homelessness in the county has seen a 162% increase from five years ago, with 1,510 homeless individuals, and most emergency shelters are at their maximum occupancy. In a media briefing on Oct. 15, 2025, Montgomery County Executive Mark Elrich condemned the department’s actions.

“The idea that we’re giving homeless people an unfair advantage by helping them is ludicrous,” Elrich said. “It gets to the point of how heartless and insensitive this administration is.”

On Nov. 25, 2025, Maryland joined 19 other states in a lawsuit against HUD, arguing that it unlawfully cut housing support for numerous Americans without congressional authorization or adequate justification. A federal judge blocked the CoC funding changes on Dec. 19, 2025, but HUD posted on its website that it will reinstate its initial plan if the court order “is no longer in effect.”

Junior Zoey Rees volunteers at the Greentree Homeless Shelter and Bridges to Housing Stability, a Columbia-based nonprofit that provides subsidized housing programs. Rees said overhauling the grant system is unjust, especially when transitional housing is significantly more difficult to maintain.

“Housing should not be based on how worthy you are,” Rees said. “It’s a human right that everyone should be able to better themselves and fix their situation.”