The FY2026 CoC competition, and what happens to your grant

Start here: what happens to your grant

This is the question keeping executive directors awake, and it has an answer that does not depend on how the litigation resolves.

Congress anticipated a delay. Section 244 of the Consolidated Appropriations Act, 2026, enacted 3 February, directs HUD to renew Continuum of Care projects that have expired or are set to expire. It works in tiers:

We are past both trigger dates. Read plainly, that third row covers everything. It is a direction to HUD rather than a form you file, so the practical step is confirming with your CoC and your HUD field office how renewals are being processed for your grants specifically, and getting the answer in writing.

What the notice contained

Everything below describes the notice as issued in June and vacated in August. None of it currently carries legal force. It is here because it is what a re-issued notice would most likely be built from, and because understanding it is how you read whatever comes next.

The money

$4.04 billion in total. Set-asides of $104 million for domestic violence bonus projects, $430 million for permanent housing serving families with children, and $1.3 billion for new Tier 2 projects with transitional housing and supportive services only prioritized. Planning costs at 5 percent of Final Pro Rata Need, unified funding agency costs at 3 percent. All awards to be made by 1 December 2026.

The structural change that mattered most to renewals

Tier 1 was set at 60 percent of Annual Renewal Demand, down from 90 percent in 2024. Tier 1 is the protected band. Dropping it by thirty points moves a large share of renewal funding into Tier 2, where it competes.

Alongside that, every project except CoC Planning and UFA had to compete, including YHDP renewals, which had previously carried protection. For a small organization holding one renewal project, those two changes together are the whole story: the floor moved and the exemption went.

The scoring

Two hundred points across three areas, plus twenty bonus points.

Two things are worth noticing about that distribution regardless of what you think of it. The single largest scoring block was about what the Continuum does rather than what your project achieves. And the performance block measured income growth from employment while excluding benefits, which scores differently for a program serving people whose realistic income path runs through disability benefits.

Eligibility and other requirements

• Applicants had to affirm they do not operate drug injection or safe consumption sites. The language was written broadly enough to reach activity funded from non-federal sources.
• Awards were tied to compliance with several executive orders, including on government efficiency, diversity programming and gender policy.
• HUD reinterpreted "self-sufficiency" as independence without public or private assistance.
• Risk review was expanded to include public sources such as news reports, and a risk review result on its own could support an adverse funding decision.
• From 1 October 2026, all CoC-leased housing was to meet NSPIRE physical inspection standards.

Where the disagreement is

We are a software company, not a policy organization, and this page is not going to tell you what to think about any of the above. What we can do is be clear about which statements are findings and which are arguments, because that distinction gets lost fast in a fight like this one.

The National Alliance to End Homelessness, which is a named plaintiff in one of the two cases, published an analysis of the notice. Among its claims: that at least 97,000 people in CoC-funded permanent housing could lose it as a consequence of the policy changes; that HUD was granted broad authority to reject applications on criteria it did not define; and that several reporting requirements referenced metrics with no standardized collection mechanism, encampment reduction among them. That estimate and those characterizations are the Alliance's, made by an organization with a position in active litigation, and should be read as such.

Their analysis also flagged internal inconsistencies in the document itself, which are checkable rather than interpretive: two different application deadlines appearing in the same notice, two different total funding figures, and an unresolved question about which definition of "elderly" applied. Those are the kind of defects that tend to matter in an administrative law challenge.

HUD's public position as of this writing is that it is evaluating the court's order and considering its legal options. We have not seen a substantive response from HUD to the specific criticisms above, and we will note one here when there is one.

What to do while this is unresolved

What decides where this goes

Three branches, roughly:

• HUD appeals to the First Circuit. The timeline extends and the outcome moves to an appellate court.
• HUD re-issues a corrected notice. A vacatur on how something was issued can often be cured by issuing it properly. What a corrected notice contains is a separate question from whether it survives.
• Congress acts again. It has already intervened once on renewals, and the 1 December award deadline in the notice is now very close.

We will update this page as those resolve rather than writing a new one, so the link you have keeps working.