Changes to the U.S. Department of Housing and Urban Development (HUD)’s funding priorities could put thousands of formerly homeless people at risk of losing their homes, including families with children and older adults, as well as individuals with disabilities and health conditions. The National Alliance to End Homelessness (NAEH) estimates that 5,105 Illinoisans, including 3,247 Chicagoans, may face homelessness again as HUD eyes more than $60 million in funding cuts to permanent housing programs. 

These changes are reflected in HUD’s Fiscal Year 2026 Notice of Funding Opportunity (NOFO) for the Continuum of Care (CoC) program. This program is our nation’s largest investment in ending homelessness.  

By radically restructuring the program and severely limiting the amount of funding that can be used to renew currently funded projects, HUD is putting the stability of thousands of Illinoisans at risk. A significant portion of funding will be redirected to new projects that reflect HUD’s revised priorities, which favor short-term assistance, transitional housing, and mandatory treatment over evidence-based Housing First programs that prioritize providing permanent housing to people experiencing homelessness.  

HUD Secretary Scott Turner and others claim that this policy shift is necessary because Housing First policies have failed. But research has shown that these policies are effective in reducing homelessness and improving quality of life for people experiencing homelessness, as well as reducing societal costs associated with homelessness such as emergency services and shelter. 

With these new changes, HUD is also intentionally ignoring persistent racial and ethnic inequities in the homeless population by denying funding to programs that attempt to address them. Black Illinoisans are eight times more likely to experience homelessness than white residents, driven in large part by structural factors like rising housing costs, lack of employment opportunities, eviction, and incarceration.  

In Illinois, there are only 34 affordable and available rental homes for every 100 extremely low-income renter households. This lack of affordable housing only increases rents, overburdens shelters and transitional housing programs, and prolongs the amount of time people experience homelessness. 

The changes implemented by HUD will cause tremendous harm for people experiencing homelessness, put additional strain on states and local communities to fill the gaps, and make the already difficult work of ending homelessness even more challenging.  

At CCH, we are committed to continuing our work with local and national partners to ensure that permanent housing solutions remain available, so no Illinoisans are forced back into homelessness after regaining their stability.