Expiring Continuum of Care projects restored, avoiding proposed program constraints

Key Takeaways

Effective April 1, the U.S. Department of Housing and Urban Development (HUD) has restored expired Continuum of Care (CoC) projects as directed by Congress in the Consolidated Appropriations Act of 2026 (P.L. 119-75). Projects that expired in Q1 or are set to expire in Q2 will be restored under Fiscal Year (FY) program competition terms, with upward adjustments for cost-of-living increases.

Critically, these projects will not be subject to a proposed HUD Notice of Funding Opportunity (NOFO) that would have curtailed permanent supportive housing (PSH) expenditures and introduced a new competition framework with fewer “protected” tier 1 funds. That NOFO remains suspended under a federal injunction stemming from ongoing litigation between HUD and a coalition of state, local and non-profit stakeholders.

Congress also built in automatic restoration triggers for future projects if funding delays continue. CoC projects expiring in Q3 or Q4 will be restored if funding is not otherwise awarded by July 1. Due to uneven distribution of CoC program years, Q3/Q4 projects represent nearly two-thirds of total CoC grantees.

However, uncertainty remains for those projects. The outcome of the pending litigation will determine the future of funding for these programs – a ruling in HUD’s favor could allow the Department to move forward with proposed changes, including PSH constraints and a reduced tier 1 protected funding framework. However, a ruling for the plaintiffs – or no decision before July 1 – would effectively require HUD to restore all remaining projects on FY 2024 terms.