HUD expected to revise CoC NOFO following court decision

Key Takeaways

On September 11, the U.S. Department of Housing and Urban Development (HUD) issued a notice titled “Notice of Research Justifying Additional Incentives for Certain Activities to Reduce Homelessness.” The agency is seeking public comment regarding several eligible activities under the Continuum of Care (CoC) Program that it looks to promote through bonus payments and other incentives.  

This follows a federal court decision last month to vacate a proposed CoC notice of funding opportunity (NOFO) for fiscal year (FY) 2026. The suspended NOFO would have directed a significant amount of program funding toward transitional housing and supportive service projects through a $1.3 billion set-aside, effectively limiting its use for permanent supportive housing projects. The court ruled, in part, that HUD failed to conduct an adequate public notice-and-comment process required for such sweeping program changes.  

What’s in the notice

The activities largely reflect the administration’s focus on short-term housing support and supportive service participation, as well as a shift away from permanent housing models.  

They specifically include:

• Transitional housing with supportive services concentrated on behavioral health treatment and improving economic self-sufficiency through employment income
• Supportive services-only projects
• Sober homes and other housing that supports treatment and recovery from substance use disorder
• Coordination with law enforcement and first responders in addressing homelessness

What’s next

It is likely that this notice is a precursor to HUD revising and re-issuing their FY 26 CoC program NOFO, once they have satisfied their public notice-and-comment requirements. In the meantime, NACo intends to submit comment prior to the October 13 deadline, as well as draft a template for counties who wish to do the same.