The HUD Continuum of Care program is the federal government’s primary funding stream for local efforts to end homelessness, channeling competitive grants each year to nonprofits, state agencies, and local governments that band together to rehouse people and keep them housed. It is administered by the Department of Housing and Urban Development and authorized under the McKinney-Vento Homeless Assistance Act, as overhauled by the Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act of 2009.1Office of the Law Revision Counsel. 42 USC 11381 – Purposes The HEARTH Act pulled several older homeless-assistance grants into a single program with four stated goals: building a community-wide commitment to ending homelessness, rehousing people quickly, connecting them to mainstream benefits, and fostering self-sufficiency.
How a Continuum of Care Is Organized Locally
Every geographic area that participates has to formally stand up a Continuum of Care. That means representatives from local homeless service providers, government agencies, public housing authorities, school districts, hospitals, law enforcement, and businesses come together as the CoC and elect a board to make decisions for the group. The board has to reflect that mix of organizations and include at least one person who is currently or formerly homeless.2eCFR. 24 CFR 578.5 – Establishing the Continuum of Care
The CoC adopts a written governance charter and updates it annually. The charter contains the board’s procedures, a code of conduct, and a formal recusal process.3eCFR. 24 CFR 578.7 – Responsibilities of the Continuum of Care Recusal is not a technicality. No board member may participate in or influence any decision to award funds to the organization that member represents, so a board member whose agency has applied for CoC funding must step out of the room during ranking and scoring.4eCFR. 24 CFR 578.95 – Conflicts of Interest Communities that handle this sloppily can jeopardize their whole application.
The board also designates one entity as the Collaborative Applicant, which is responsible for pulling together and submitting the community’s consolidated application to HUD. That entity works alongside a lead agency that manages the CoC’s day-to-day operations.
Coordinated Entry: The Single Front Door
Each CoC must run a coordinated entry system that gives every person or family seeking help one initial, comprehensive assessment of their housing and service needs.3eCFR. 24 CFR 578.7 – Responsibilities of the Continuum of Care Instead of every shelter and housing program keeping its own intake and waiting list, applicants enter through one door and the system triages them to the most appropriate resource.
The CoC has to build the system in consultation with local Emergency Solutions Grants recipients and adopt specific written policies for serving people fleeing domestic violence, dating violence, sexual assault, or stalking who approach a non-specialized provider. Victim service providers often maintain confidential locations and cannot share client data through the same channels as other programs, which is where coordinated entry gets operationally tricky.
What the Program Funds
CoC dollars pay for five categories of projects, covering the range from street outreach to long-term housing with services attached.5eCFR. 24 CFR 578.37 – Program Components and Uses of Assistance
Permanent Supportive Housing
Permanent Supportive Housing (PSH) serves individuals with disabilities and families where at least one member has a disability. It has no time limit and pairs housing with voluntary supportive services tailored to the participant. HUD requires CoCs to prioritize chronically homeless individuals for PSH. A person is chronically homeless if they have a disability and have been continuously homeless for at least 12 months, or homeless on at least four separate occasions in the past three years totaling 12 months or more.6U.S. Department of Housing and Urban Development. Notice on Prioritizing Persons Experiencing Chronic Homelessness in Permanent Supportive Housing
Rapid Re-Housing
Rapid Re-Housing (RRH) offers short- or medium-term rental assistance for up to 24 months, paired with services meant to stabilize the household in private-market housing. RRH does not require a disability, and the expectation is that participants will take over the rent by the time the subsidy ends.
Transitional Housing, Supportive Services, and HMIS
Transitional Housing provides temporary residence for up to 24 months with the goal of moving participants into permanent housing before their time runs out. Supportive Services Only projects pay for outreach, case management, legal help, and similar assistance without providing housing. Every CoC also has to fund a Homeless Management Information System (HMIS) that collects standardized data on everyone served across the community.7HUD Exchange. HMIS Requirements A fifth component, homelessness prevention, is typically available only to high-performing communities and covers things like back rent or utility arrears for people at imminent risk of losing housing.
Eligible Costs, Rent Rules, and the 25 Percent Match
Depending on the component, CoC funds can go toward property acquisition, rehabilitation, new construction, leasing, rental assistance, operating costs, and supportive services.8GovInfo. 42 USC 11383 – Eligible Activities Administrative costs are capped at 10 percent of the project grant.9HUD Exchange. CoC Eligible Activities – Cost Limits and Sharing Requirements
Any unit rented with CoC money has to pass a rent reasonableness test. The recipient compares the proposed rent to what unassisted tenants pay for similar units in the area, weighing location, size, quality, amenities, and condition. For individual unit leases, the rent also cannot exceed HUD’s fair market rent for the area.10eCFR. 24 CFR Part 578 – Continuum of Care Program Skipping or under-documenting this step is one of the fastest ways to draw a monitoring finding.
CoC grants are not fully federally funded. Recipients have to match at least 25 percent of each grant with cash or in-kind contributions, with one exception: leasing costs are exempt from the match. The match can come from state, local, or private sources, and even from other federal programs if those funds are not themselves barred from being used as match. In-kind donations such as goods, professional services, or donated space count, but third-party services must be documented in a memorandum of understanding signed before the grant starts.11eCFR. 24 CFR 578.73 – Matching Requirements
Participant Rights
CoC-funded projects cannot condition housing on participation in disability-related services like mental health treatment, outpatient care, or taking prescribed medication. Providers can require participation in other, non-disability-related services, and projects whose specific purpose is substance abuse treatment may require participation in that treatment.10eCFR. 24 CFR Part 578 – Continuum of Care Program A PSH program can require tenants to meet with a case manager. It cannot terminate someone for refusing psychiatric medication.
When a project does move to terminate a participant, federal rules require a formal due process procedure. At minimum, the participant must receive written program rules before assistance begins, a written notice explaining the reasons for termination, an opportunity to present objections to someone other than the person who made the termination decision, and prompt written notice of the final outcome. For PSH serving hard-to-house populations, providers must examine all extenuating circumstances and reserve termination for the most severe cases.
How the Funding Competition Works
Each year the Collaborative Applicant submits the community’s consolidated application through HUD’s e-snaps system according to deadlines set in the annual Notice of Funding Opportunity (NOFO).12HUD Exchange. CoC Grant Administration – CoC Grant Life Cycle HUD scores and ranks CoC applications nationally, then splits each community’s requested funding into two tiers. Tier 1 equals 90 percent of the community’s Annual Renewal Demand, and projects ranked within that threshold are conditionally selected from the highest-scoring CoC application on down. Tier 2 covers everything else and competes nationally for whatever funding is left, so lower-ranked projects in weaker CoC applications can lose out entirely.
That structure pushes each CoC to make hard local choices about which projects to rank highest. A community that ranks a low-performing renewal above a stronger new project risks losing both if the weak project drags down the overall score.
What Changed in FY 2025
The FY 2025 NOFO introduced significant structural changes. HUD now requires 70 percent of projects to compete for funding, ending a long-standing practice under which most renewal projects were funded automatically without a fresh look at performance.13U.S. Department of Housing and Urban Development. HUD Secretary Scott Turner Leads Monumental Reforms The NOFO also shifts funding emphasis toward transitional housing and supportive services, encourages partnerships with law enforcement, removes barriers for faith-based providers, and puts greater weight on personal accountability and self-sufficiency.
What Happens After a Grant Is Awarded
Every recipient files an Annual Performance Report (APR) electronically through HUD’s Sage HMIS Reporting Repository at the end of each operating year.14HUD Exchange. CoC APR Submission Guidance The APR draws on HMIS data and covers housing placement rates, income changes, and returns to homelessness. HUD uses those reports to evaluate individual project performance and shape future funding, so a late or sloppy APR does not just create compliance headaches. It weakens the project’s competitive position in the next round.
HUD also evaluates each CoC community against seven System Performance Measures, including length of time people remain homeless, rates of return to homelessness, changes in the total homeless count, income growth during program participation, first-time homelessness, and successful placements from both outreach and housing programs. Those measures feed directly back into the scoring of the overall CoC application, and into how much Tier 1 protection a community’s projects will get the following year.
Grant durations vary by project type. Leasing, supportive services, HMIS, and operating cost grants may be awarded for up to three years initially. Tenant-based and sponsor-based rental assistance can be awarded for up to five years in one competition, and project-based rental assistance for up to 15 years, subject to annual appropriations.10eCFR. 24 CFR Part 578 – Continuum of Care Program