Housing First funding changes in 2026: Could tenants lose their homes?

No, the 2026 federal shift away from Housing First does not automatically make people in permanent supportive housing lose their homes. It does put some programs’ future funding at risk. For tenants, the question is whether their housing or services depend on a grant that must be renewed under the new rules—and what their provider can do if that funding changes.

What changed in 2026?

The Department of Housing and Urban Development’s 2026 Continuum of Care competition makes $4.04 billion available to organizations that provide homelessness assistance. Its priorities favor transitional housing, treatment and other supportive services over the previous emphasis on permanent housing. HUD has set aside $1.3 billion for new projects, with a priority for transitional housing and services-only programs.

Housing First generally aims to move people into permanent housing without first requiring sobriety, employment or participation in treatment. Supportive services can still be offered. The Trump administration says its new approach will put greater emphasis on recovery and self-sufficiency. Housing providers and advocates have warned that reducing support for permanent housing could leave some residents with fewer options, particularly people who need long-term assistance.

The funding competition also makes more existing grants subject to competition. That matters because a local organization may rely on an annual grant to help pay rent, operate a building or provide services. A change to its award could affect its budget even if the people it serves have lived there for years.

Does a grant change mean an eviction?

Not by itself. A federal grant decision is not an eviction notice, and the outcome for any tenant depends on their lease, the funding behind their unit, local rules and whether another source of assistance is available. A provider facing a shortfall may seek replacement funding or adjust its plans; residents should not assume that every proposed change will happen.

Nor does the Continuum of Care competition cover every form of housing assistance. Someone receiving a Housing Choice Voucher, for example, should not treat a headline about this particular grant competition as notice that their voucher has ended. The first step is to identify the specific program paying for their housing.

Legal challenges have added uncertainty. A federal appeals court allowed HUD’s 2026 competition to proceed while an appeal continues, and HUD reopened applications with a September 30 deadline for most communities. Permission to proceed with applications is not a final decision about every project’s funding or every resident’s housing.

What should a current resident ask?

If you live in supportive housing, contact your case manager, housing provider or property manager and ask for answers specific to your unit:

• Does my rent assistance or building depend on a Continuum of Care grant?
• When does that grant expire, and has the provider applied to renew it?
• Have you received a funding decision, or are you still planning for possible outcomes?
• If funding changes, what other assistance or housing options are you pursuing?
• Whom should I contact if I receive a notice about my rent or lease?

Keep copies of your lease, rent notices and any written updates. If someone tells you that you must move, ask for the notice and explanation in writing. An organization’s funding problem does not erase applicable tenant protections; those protections vary by location and housing arrangement. A local legal aid organization can help you understand a notice before you agree to leave or sign a replacement lease.

What if you need housing help now?

If you are at risk of homelessness, do not wait for the grant dispute to be resolved. In most U.S. areas, dialing 211 can connect you with referrals for shelter and local assistance. HUD’s Find Shelter service can help locate nearby shelter, health care and other resources, while a local Continuum of Care provider can explain how to seek housing assistance in your community. If you are behind on rent, ask about state or local emergency rental assistance; eligibility and available funding vary.

Veterans facing homelessness can also contact the National Call Center for Homeless Veterans at 1-877-424-3838. If you already have a housing case manager, tell them promptly about any rent notice or risk of losing your unit so they can check the options tied to your particular program.