For Immediate Release: June 26, 2026
Contact: Kristin Ginger, Director of Communications & Development, Housing Action Illinois, kristin@housingactionil.org or 312-854-3333
CHICAGO, IL – A new analysis from the National Alliance to End Homelessness finds that 5,105 Illinoisans are at risk of losing their homes as Illinois’ 19 Continuum of Care networks stand to lose more than $60 million in existing federal homelessness funding for permanent supportive housing and other permanent housing under recent changes proposed by the U.S. Department of Housing and Urban Development (HUD).
HUD released its FY2026 Notice of Funding Opportunity (NOFO) for the Continuum of Care (CoC) program on June 1. The CoC is our nation’s largest investment in ending homelessness. Funds currently received by CoC networks are subject to a national competitive application process. In a dramatic break from the approach that has been the focus for nearly two decades, HUD has been proposing to reject evidence-based Housing First policies and practices in favor of short-term assistance, transitional housing and mandatory treatment.
Housing First programs—especially permanent supportive housing—pair stable, affordable housing with mental health care, substance use treatment, medical care for other chronic diseases, and additional support people need to rebuild their lives. Decades of research show this approach is more effective at ending homelessness than alternatives, which matters greatly in a country where there is nowhere near enough affordable housing to begin with.
“Permanent supportive housing is a proven tool to end homelessness, particularly for those with mental illness or substance use disorder, and has had longtime bipartisan support. Replacing permanent housing subsidies with time-limited support or funding for supportive services alone will lead to more people experiencing homelessness, not fewer,” said Mark Ishaug, President and CEO of Thresholds, one of Illinois’ largest and longest serving providers of community mental health treatment and supportive housing.
HUD proposed similar changes for the FY2025 CoC Program NOFO. However, a combination of court decisions and actions by Congress required HUD to renew existing contracts for one year. The provisions in the FY26 NOFO are once again subject to legal challenge.
“We urge HUD and the administration to reverse course and return to funding what works: permanent supportive housing and other Housing First programs supported by evidence,” said Bob Palmer, Policy Director for Housing Action Illinois.
Many groups in Illinois have been working together to appeal to members of our Congressional delegation to expand funding for the CoC program, keep a focus on Housing First strategies, and require HUD to protect existing permanent supportive housing and the people who live in it.
These groups include, but are not limited to: Alliance to End Homelessness in Suburban Cook County, AIDS Foundation Chicago, Catholic Charities of the Archdiocese of Chicago, Center for Housing and Health, Chicago Coalition to End Homelessness, Chicago Homelessness and Health Response Group for Equity (CHHRGE), Chicago Funders Together to End Homelessness, Christian Community Health Center, Housing Action Illinois, Illinois Shelter Alliance, Lincoln Park Community Services, NAMI Chicago, New Moms, South Suburban PADS, Supportive Housing Providers Association and Thresholds.
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About Housing Action Illinois
Housing Action Illinois has been leading the movement to end homelessness, address the shortage of affordable rental housing, and expand homeownership opportunities in Illinois for nearly 40 years. With our 200+ member organizations, we bring everyone together to work toward our vision of an Illinois where everyone has a stable, good home.