Homeless response funding: Federal sources and local innovation
Last updated on: June 15, 2026
Overview
Homelessness in the United States is at an all-time high. While cities and counties find ways to grow their housing stock, lower housing costs, and prevent displacement, they must simultaneously meet the emergency needs of people and families currently experiencing homelessness. This brief provides an overview of federal funding sources for local homeless response and examples of how cities have used them. Recognizing that federal support falls short of the need and is subject to shifting policy priorities with each new federal administration, we also highlight examples of cities leveraging state and local funding to support their local homeless response efforts.
The history of contemporary homeless response funding
Today’s federal infrastructure for funding local homeless responses dates to the late 1970s and 1980s, when the nation saw a major rise in homelessness. The first federal legislation explicitly targeting homelessness was the Stewart B. McKinney Homeless Assistance Act of 1987 (renamed the McKinney-Vento Homeless Assistance Act in 2000). McKinney-Vento established the first federal funding mechanisms for emergency shelter, supportive housing demonstrations, and municipal homeless planning, and the first federal entity overseeing homeless programming and policy across all federal departments (the United States Interagency Council on Homelessness, or USICH).
McKinney-Vento set the stage for the passage of the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act of 2009, the most recent and expansive legislation guiding homeless response efforts in the United States. The HEARTH Act reauthorized McKinney-Vento, expanded and codified federal homeless response as part of the federal government’s response to the Great Recession of 2008, and also established many of the federal homeless response mechanisms and funding sources in use today.
Importantly, the HEARTH Act identified the lack of affordable housing and limited housing assistance programs as the primary drivers of homelessness and established federal definitions of homelessness that continue to inform qualification thresholds for homeless assistance and housing programs today. The HEARTH Act codified into law Continuums of Care (CoCs), administrative bodies that coordinate homeless response planning, service delivery, and funding efforts across government agencies and nonprofits for a jurisdiction or set of jurisdictions. The Act also required that CoCs use a Homeless Management Information System (HMIS) to collect local homeless service data. Additionally, the HEARTH Act formally established the provision of permanent housing in response to homelessness as a best practice, representing the culmination of a federal shift away from primarily funding transitional housing and emergency services. As a result, the percentage of national CoC funding allocated to permanent housing programs, such as permanent supportive housing (PSH) and rapid rehousing (RRH), rose from 59 percent in 2009 to 82 percent in 2024.
More recently, during the COVID-19 pandemic, the federal government made unprecedented additional investments in homelessness prevention and response. Evidence suggests these investments, together with swift state and local action, prevented a massive surge in homelessness. But with the expiration of COVID-19 relief funding, even as housing cost burdens for both renters and homeowners continue to rise, localities face a new urgency to effectively tap existing funds and seek new sources of funding for their local homeless response.
Federal funding sources for local homeless responses
The federal government, through the homelessness assistance programs established by the HEARTH Act and other means, channels funding to locally administered programs that directly serve individuals experiencing homelessness. The following tables provide a comprehensive overview of federal funding sources available to jurisdictions nationwide to respond to and reduce homelessness. It is worth noting that the vast majority of federal funding for homeless response is distributed through HUD to local CoCs across the country that administer these funds in their communities.
HUD also oversees several housing development programs that build affordable housing for low-income people and families and may be used to develop supportive housing for individuals experiencing or at risk of homelessness. You can learn more about these development funding streams here.
Table 1. Homeless Assistance Funding Programs
| Program Name | Description | Relevant Department |
|---|---|---|
| Continuum of Care (CoC) | HUD’s CoC Program funds regional or local planning bodies that coordinate and fund service delivery to the homeless. The model is designed to end homelessness by helping fragmented service providers work together across a four-part spectrum: 1) outreach, intake, and assessment; 2) emergency shelter; 3) transitional housing; and 4) permanent supportive housing. This program is awarded to nonprofits, states, local jurisdictions, public housing authorities (PHAs), and tribal governments on a competitive basis. | U.S. Department of Housing and Urban Development (HUD) |
| Emergency Solutions Grants (ESG) | The ESG program assists people with quickly regaining stability after experiencing a housing crisis and/or homelessness. ESG funds are awarded to states, counties, metropolitan areas, and territories using a population formula. Cities with populations over 50,000 and counties with populations exceeding 200,000 (known as “entitlement jurisdictions”) are eligible for funding. These funds can be used for street outreach, emergency shelter, homelessness prevention, rapid rehousing assistance, and homelessness management information systems. | HUD |
| Housing Opportunities for Persons With AIDS (HOPWA) | HOPWA helps grantees provide housing assistance and related supportive services to low-income individuals affected by HIV/AIDS and experiencing or at risk of homelessness and housing instability. There are two types of grantees: non-profit organizations and municipalities. HOPWA funds may be used for a wide range of housing, social services, program planning, and development costs. Grants are awarded in two ways: through a competitive process for states, local governments, and nonprofits, and through a formula allocation for states and qualifying cities. | HUD |
| Youth Homelessness Demonstration Program (YHDP) | The YHDP Program is an initiative designed to reduce the number of youth experiencing homelessness. The goal of the YHDP is to support selected communities, including rural, suburban, and urban areas across the United States, in developing and implementing a coordinated community approach to preventing and ending youth homelessness. This program is awarded to states, counties, cities, townships, and nonprofits on a competitive basis. | HUD |
| Title V | Title V of the McKinney-Vento Homeless Assistance Act, Public Law 101-645 (42 U.S.C. 11411), enables eligible organizations to use unutilized, underutilized, excess, or surplus federal properties to assist persons experiencing homelessness. No funding is available under Title V. Properties under this program are made available to states, local governments, and eligible nonprofits via an application process. | HUD |
| Emergency Housing Vouchers (EHVs) | The EHV program was established under the American Rescue Plan Act of 2021. EHVs offer tenant-based rental assistance for individuals and families experiencing homelessness, at-risk of homelessness, or fleeing domestic violence. EHV funding ends in 2026. | HUD |
| Supportive Services for Veteran Families (SSVF) Program | For very low-income veterans, SSVF provides case management and supportive services to prevent the imminent loss of a veteran’s home, identify a new, more suitable housing situation for the individual and his or her family, or rapidly rehouse veterans and their families who are homeless and might remain so without this assistance. Activities funded by SSVF include rapid rehousing and homelessness prevention services. | VA |
| HUD-Veterans Affairs Supportive Housing (HUD-VASH) | The HUD-Veterans Affairs Supportive Housing (HUD-VASH) program combines HUD’s Housing Choice Voucher (HCV) rental assistance for homeless veterans with case management and clinical services provided by the U.S. Department of Veterans Affairs (VA). The VA provides these services for participating veterans at VA medical centers (VAMCs) and community-based outreach clinics. HUD-VASH vouchers are awarded based on geographic need and PHA administrative performance. | HUD |
View the data in this spreadsheet.
Note. When reviewing FY26 homeless response funding levels, it’s important to consider the impact of inflation and the dollar’s reduced purchasing power. For example, although funding amounts are higher in FY26 compared to FY16, the value of the dollar decreased by 28 percent over that time period. This means that actual increases in homeless response funding were more modest than they appear. In the case of ESG funding, the inflation-adjusted amount actually decreased compared to FY16. In the bar graph above, the dark blue bars show FY26 funding levels adjusted for inflation and expressed in 2016 dollars, illustrating the purchasing power equivalent of current appropriations.
Table 2. Rental and Other Housing Assistance Programs That May Support Homeless Response
| Program Name | Description | Relevant Department |
|---|---|---|
| Housing Choice Voucher (HCV) Program | The HCV Program (also known as Section 8) helps low-income families, elderly persons, veterans, and disabled individuals afford housing in the private market. Program participants can choose any eligible housing unit, including single-family homes, townhouses, and apartments, with rent partially covered by a subsidy paid directly to the landlord. PHAs receive funding from HUD to administer the program locally, and may prioritize vouchers for individuals experiencing homelessness. | HUD |
| Tenant Protection Vouchers (TPVs) | Tenant Protection Vouchers (TPVs) are used by HUD to protect families receiving HUD assistance from housing displacement and to enable relocation in instances of loss of housing subsidy resulting from mandated actions. For example, in the FY26 congressional spending bill, TPVs are listed as a housing subsidy option for individuals and families expected to lose their EHV funding in 2026. TPVs are a form of HCV and are administered by PHAs. | HUD |
| HOME Investment Partnerships Program (HOME) | The HOME Investment Partnerships Program (HOME) provides formula-based block grants that localities and states can use to support a variety of activities related to affordable housing. Among other eligible uses, states and local jurisdictions can utilize federal HOME funds to expand the amount of tenant-based rental assistance (TBRA) available to low-income households, including individuals experiencing homelessness. This program is awarded to states, metropolitan areas, urban counties, insular areas, and consortia using an allocation formula designed to reflect relative housing need. | HUD |
State and local uses of federal homeless response funding
Jurisdictions across the country use federal homeless response funding to provide essential services, connect people to housing, and reduce homelessness. In this section, we provide brief examples of how cities have used key federal funding sources to deliver essential services intended to address and reduce homelessness in their communities.
CoC funding
The City of Houston is considered a national leader in addressing homelessness. In 2024-25, Houston allocated over 90 percent of its CoC dollars to permanent housing efforts. The city also uses CoC funds to support approximately half of all its permanent housing for individuals experiencing homelessness. By leveraging its CoC as a primary source for funding and planning, Houston reduced its overall homeless population by more than 60 percent between 2024 and 2011.
ESG funding
The City of Philadelphia used federal ESG funding in FY 2024 to finance a range of homeless service programs. Its $3.86 million grant award from HUD enabled the city to fund homeless prevention assistance, emergency shelter operations, and homeless system data collection. Between 2024 and 2025, Philadelphia leveraged these funds to shelter almost 15,000 individuals, assist 2,077 people through Rapid Re-Housing (RRH), and help 1,703 households with homeless prevention or diversion services.
HCV funding
While Housing Choice Vouchers (HCVs) are not expressly designated to serve individuals and families experiencing homelessness, PHAs have discretion to prioritize a certain number of vouchers for this population, which may be used to facilitate access to housing. The King County Housing Authority supports almost 6,300 households that previously experienced homelessness using vouchers and administers more than 4,700 vouchers for individuals experiencing homelessness.
HUD-VASH funding for HCVs targeting homeless veterans
The HUD-VASH (Veterans Affairs Supportive Housing) program combines HCV rental assistance with case management and services provided by the U.S. Department of Veterans Affairs. As of December 2025, there were more than 115,000 HUD-VASH vouchers in circulation nationally, with over 93,000 tied to units providing housing to formerly homeless veterans and their families. As of fall 2024, access to HUD-VASH vouchers contributed to three states and 85 communities “effectively ending veteran homelessness.” This means these areas now have enough housing resources to ensure that veteran homelessness is rare, brief, and non-recurring in those communities.
Federal homeless response funding uncertainty
The HEARTH Act has helped create a more stable and consistent approach to addressing homelessness in cities and counties through CoCs, federal block grant programs, and rental assistance. Together, these funding streams have enabled communities to build long-term infrastructure, expand permanent housing programs, and provide services to people experiencing homelessness.
At the same time, federal funding priorities, program requirements, and funding levels can change over time in response to shifting administrations, congressional priorities, and budget pressures. The changes proposed in recent federal funding and policy guidance – including the early sunsetting of the Emergency Housing Voucher (EHV) program and the Fiscal Year 2026 CoC Notice of Funding Opportunity (NOFO) announcing the current federal administration’s shift away from Housing First, an evidence-based approach that emphasizes providing access to permanent housing without preconditions, towards mandatory service provision and transitional housing programs – are important reminders of the potential for disruption.
Local practitioners and policymakers fear that the implementation of the policy and funding changes in the FY26 NOFO will reduce funding available for evidence-based programs and lead to increases in homelessness. These impacts are likely to be most severe in jurisdictions that rely heavily on CoC funding for their permanent housing programs — such as Louisiana, where 75 percent of permanent housing beds are financed by CoC funding. In response, jurisdictions across the country are now considering alternative state and local funding sources for their homeless response efforts to help fill potential gaps in federal funding and be more resilient to future fluctuations in federal funding.
Cities with robust state and local investment and coordination of homeless response efforts
In this section, we profile four jurisdictions that have creatively used state and local funding sources and enhanced municipal planning and coordination to bolster their local homeless response efforts, drawing on interviews with municipal leaders and policymakers directly administering the programs.
Atlanta, Georgia
The City of Atlanta is creatively using bonds, raising public and private funds, and unifying city agencies and nonprofit partners around a coordinated, citywide housing and homeless response plan. While it does not have a dedicated local funding source for its homeless response, it is operating with urgency and “outside its charter” to meet the needs of its most vulnerable residents, according to a housing administrator in the Mayor’s Office. As the city braces for the impending impact of federal funding and policy shifts, it acknowledges that it does not have “all the answers,” according to the senior housing official, but its homeless response leaders are “leaning on each other as much as possible — the cavalry isn’t coming, so we have to look inward.”
Key features:
- An emphasis on creating more housing, including for those experiencing homelessness. With strong leadership from the Mayor’s Office, the city has committed to developing or preserving 20,000 units of affordable housing by 2030. Atlanta has already built more than 50 percent of this target, having developed approximately 13,000 units in just over 4 years. This citywide housing initiative focuses on creating affordable housing across a broad swath of city neighborhoods and at a range of income levels, while emphasizing the provision of housing for individuals experiencing homelessness.
- Creative use of bonds. Atlanta has been able to use its AAA credit rating to issue two municipal bonds, the Homeless Opportunity Bond and the Housing Opportunity Bond, raising a total of $60 million for housing production and programs designed to combat homelessness. The Homeless Opportunity Bond raised $50 million for capital projects, including 500 units of permanent housing for individuals experiencing homelessness as part of the city’s “Rapid Housing Initiative.” The city was able to develop these units quickly, with the last finalized in April of 2026, just two years after the initiative was formally launched in January of 2024. At $10 million, the city is using the Housing Opportunity Bond as a more flexible and rapidly deployable funding source for operations and services.
- Public-private fundraising at scale. The City of Atlanta coordinates an extensive citywide funding campaign alongside the city’s lead agency for its CoC, Partners for HOME. Through their joint homeless response initiative, Atlanta Rising, they have raised over $163 million to date. About two-thirds of this funding comes from local, public sources, one-third from private philanthropic donors, and only $14 million from federal investment. For the significant portion of Atlanta’s homeless response funding from private sources, the city has leveraged a diverse coalition of Fortune 500 companies and private philanthropic donors through a coordinated and effective fundraising campaign, weaving together a mix of public and private funding sources that are having a real impact on the ground.
- The “Affordable Housing Strike Force” as a governance innovation. The city created a “strike force” to streamline and coordinate all of its housing development activities and to effectively time and leverage all available funding sources. Composed of housing leaders from the government and nonprofit sectors, the strike force uses a common application for housing developers to streamline the review of housing development projects through a centralized leadership and funding structure. This approach has resulted in “stuck projects” moving along after years of hold-up, and has enabled the city to aggressively pursue its overall affordable housing and homeless response goals.
Albuquerque, New Mexico
Unlike many jurisdictions that rely heavily on nonprofit CoC leads, Albuquerque’s Department of Health, Housing, and Homelessness (HHH) directly oversees much of the city’s homeless response continuum, which includes emergency shelters, housing navigation services, and permanent supportive housing. The department also invests a significant amount of local general funds in these efforts. HHH’s leadership has also effectively lobbied the state legislature and the governor’s office to invest state funds in Albuquerque’s homeless response.
Key features:
- City government as the primary system operator. Albuquerque reconfigured its homeless response system in 2020 to create the Department of Health, Housing, and Homelessness’ (HHH) “Gateway System.” This system allows the city to coordinate and fund a broad spectrum of homeless services, including city-run emergency shelters; recovery, substance-use, and respite care; and housing and supportive service connection programs.
- Effective lobbying for state-level investment. Recognizing the need for additional investment in its homeless response, leaders from HHH and other city departments developed a strategy to lobby the New Mexico State Legislature and the Governor’s Office for support. This lobbying effort resulted in the largest state-level investment in Albuquerque’s homeless response in the state’s history, with over $40 million of a $120 million state investment going directly toward homeless response in the metro area, according to HHH leadership.
- Significant and diverse funding sources create a meaningful buffer and convey local commitment. Two-thirds of the HHH’s $60 million departmental budget comes from non-federal sources (i.e., city, county, and state funds), according to an HHH director. Additionally, Albuquerque leveraged local voter-approved general obligation bonds, revenue from a county behavioral health receipts tax, and opioid resettlement and cannabis tax dollars to fund major capital projects and service programming for the homeless response system. This coordinated system of funding streams conveys the city’s commitment to investing in homelessness solutions over the long term and creates meaningful insulation against federal funding volatility.
- A locally funded PSH voucher program is rare and notable. The majority of the city’s permanent supportive housing (PSH) voucher program for the city’s chronically homeless population is locally funded.
Denver, Colorado
Like Albuquerque, Denver’s municipal government has taken the lead in coordinating its local homeless response. The city’s Department of Housing Stability (HOST) relies on a variety of funding streams, including several local taxes, which help the department maintain its permanent supportive housing and other homeless response efforts amid growing uncertainty about federal funding. HOST’s collaboration with other agencies and nonprofit organizations at the regional and state levels, coupled with its focus on cross-system collaboration (for example, bridging housing and public health), has led to new opportunities to enhance its homeless response.
Key features:
- A diverse set of local funding sources, including local taxes. Denver’s Department of Housing Stability (HOST) draws on a diverse set of local and state-level funding streams to finance the city’s homeless response system. Its largest single source of revenue is the city’s general fund, from which HOST receives approximately $72 million annually. This is supplemented by $113 million drawn from local tax revenue funds, including the Homeless Resolution Fund (which relies on a local sales tax) and the Affordable Housing Fund (which relies on property and marijuana tax revenue). Another $24 million of HOST’s budget comes from grants, including federal grants.
- Dedicated tax measures require careful design. Though the Homeless Resolution Fund has provided stable resources for homelessness programs in Denver, restrictive ballot language has constrained how funds can be used. In particular, these funds are difficult to use for staffing and administrative capacity needs.
- Failed ballot measures are instructive. At the same time, the failure of a proposed 2024 Denver ballot measure to expand homelessness funding demonstrates the importance of marketing and communications to ensure voters understand the need for additional funding and how it will be used. One way cities can support public messaging for future initiatives is by building the infrastructure to track the spending and outcomes of current programs, increasing the likelihood of future support.
- Collaboration with a spectrum of regional, state, and cross-system partners on homeless response. Though federal CoC funding is only a small portion of overall homeless program spending in Denver, HOST is a part of the regional CoC, which is actively preparing contingency plans in response to possible federal policy and funding changes. The State of Colorado is also playing a major role in these conversations. Finally, Denver is also partnering with cross-system stakeholders to broaden its homeless response. For example, HOST is working with the public health system to create a safety net for three groups: people exiting hospitals, individuals within the homeless system who need substance abuse services, and people with intellectual and developmental disabilities.
Oakland, California
Although both the City of Oakland and the State of California face budgetary constraints and anticipate additional funding and service gaps because of changes in federal policy, their efforts to coordinate more closely and to integrate housing with homeless services give them a chance to protect and sustain their systems for responding to homelessness. Similarly, ballot measures like Measure W and Measure U have provided the Oakland region with large, flexible sources of funding that can now be used to both maintain and strategically enhance its homeless response strategy.
Key features:
- A new municipal office to coordinate local homeless response and investment. Oakland’s municipal government created a new “Homeless Solutions Office” that sits within the Office of the City Administrator to enhance coordination of homeless response across city departments. The office represents a structural commitment to homeless response.
- Local bond measures are doing the heavy lifting, while prevention pilots show promise. In FY24 -25, approximately 75 percent of Oakland’s municipal budget for housing and homeless response came from local sources. Approximately 73 percent of that local investment was generated by Measure U, a local bond measure focused on producing and preserving approximately 3,000 units of affordable housing by 2030. In addition to creatively funding direct homeless response programs and housing development, Oakland is using its resources to implement promising prevention programs in an effort to reduce the number of people entering homelessness, as part of its wider homeless response strategy. An evaluation of Oakland’s Keep People Housed (KPH) program, a targeted and racial-equity-focused prevention initiative financed by redevelopment agency tax increment funds, found that 84 percent of program participants were able to keep their housing thanks to the program’s support.
- A county-level tax is also creating a large pool of flexible funding. Oakland has begun to benefit from another ballot measure, Measure W, which created a half-cent (0.5) sales tax for Alameda County in 2020. Measure W has already generated over $810 million, 80 percent of which is earmarked for the region’s “Home Together” fund for homeless response. City leaders had hoped to use these funds to create new programs, rather than preserve existing ones. “More and more, [Measure W] funding will be used to backfill gaps as opposed to enable other expansions or innovations, which was the original intention,” said a city administrator who was instrumental in organizing the city’s Homeless Solutions Office. Yet despite these challenges, the fund gives Oakland considerable power to chart its own course on homeless response.
- Ballot measures are a promising tool, but must be carefully designed. Echoing homeless response leaders in Denver, an executive at East Bay Housing Organizations (EBHO) said that while “other cities across the country may benefit from exploring ballot measures as a way to generate much- needed funding for housing and homeless response,” how a ballot measure is structured and shared with the public matters. Key considerations include building in long-term funding for operations and services (not just development capital or rental assistance), clearly articulating intent and expected outcomes to voters, and emphasizing the cost savings of housing compared with more punitive or less effective interventions.