Housing and Homelessness

Mar 11

Last Updated: April 7, 2025

Homeless assistance grants approved in January 2025 have not been released.
HUD fair housing and housing counseling grants were paused.
$30 million in HUD grants in 33 states were terminated in February 2025.

Grants being cut or changed

Key U.S. Department of Housing and Urban Development (HUD) programs are affected. A January 2025 White House order briefly froze all federal grants and loans, including housing funds. Though the freeze was later rescinded after legal challenges, it caused delays. For example, the next round of homeless assistance grants approved in January hasn’t been released yet, raising fears that funding may not reach shelters on time.

Workforce and staff impact

HUD is also slashing staff in offices that handle homelessness and community development. An internal plan would cut 84% of staff in the office that disburses homelessness program funds. This drastic cut could slow down getting money to local housing nonprofits, since far fewer people would process grants.

Eliminations or policy shifts

The administration signaled it may shift homeless program priorities. While not official yet, advocates worry funding could be steered away from “Housing First” approaches. Also, some smaller HUD grants (like fair housing and housing counseling) were paused. In one move, 78 HUD grants in 33 states (worth $30 million) were terminated in February, possibly targeting initiatives from the previous administration.

On hold or court challenges

The across-the-board grant freeze was challenged in court and blocked by a judge. Even so, some housing funds remained in limbo as agencies were slow to restart payments. Lawsuits by nonprofit coalitions argue that holding back congressionally approved housing funds is illegal. This uncertainty makes it hard for housing agencies to plan.

Timeline

The initial freeze took effect immediately in late January 2025, but was lifted within days. Staff layoffs at HUD are expected to happen during 2025. Future budget cuts (if Congress approves) could start in fiscal year 2026 (October 2025). Nonprofits should brace for immediate delays (some grants slowed now) and possible funding reductions next year.

State-level impact

States administer many HUD funds. For example, South Carolina, North Carolina, and Ohio rely on HUD’s Community Development Block Grants (CDBG) and HOME programs to fund local housing projects. A prolonged freeze or cut means fewer home repairs and shelter beds. Kentucky and West Virginia housing authorities, which help many families with Section 8 rental vouchers, could see disruptions if voucher funds are delayed. In Pennsylvania, which received over $500 million in HUD grants last year, state officials warn that any cuts will strain homeless services during the upcoming winter. Overall, states with high poverty (like WV and KY) have less local revenue to fill gaps if federal housing aid drops.

Sources

National Low Income Housing Coalition. “NLIHC Statement on Trump Administration’s Decision to Freeze Federal Grants and Loans.” NLIHC, Jan. 26, 2025. https://nlihc.org/news/nlihc-statement-trump-administrations-decision-freeze-federal-grants-and-loans

Davis, Adam. “SC Groups Worry over Damage Threat from Trump’s Funding Freeze.” WIS News 10, Jan. 30, 2025. https://www.wistv.com/2025/01/30/sc-groups-worry-over-damage-threat-trumps-funding-freeze

Rose, Emily. “Trump Freezes HUD Funding, Putting Homeless Housing Programs at Risk.” NPR, Feb. 22, 2025. https://www.npr.org/2025/02/22/g-s1-50199/doge-trump-hud-cuts-homeless-housing-programs

Ducharme, Jamie. “Trump’s HUD Cuts Freeze Funding for Homelessness Programs.” Time, Feb. 23, 2025. https://time.com/7270242/department-of-housing-and-urban-development-funding-cuts-trump-administration

Adair Hill