Understanding the Continuum of Care Homeless Assistance Program

The Continuum of Care (CoC) Program stands as a cornerstone initiative designed to combat homelessness across communities. It is fundamentally structured to offer assistance to individuals and families facing homelessness, including unaccompanied youth, by providing crucial services. These services are meticulously crafted to facilitate their transition into stable transitional and permanent housing, ultimately fostering long-term stability and self-sufficiency.

More than just immediate housing solutions, the CoC Program embodies a comprehensive approach to tackling homelessness at a systemic level. It champions community-wide planning and the strategic allocation of resources to effectively address the multifaceted challenges of homelessness. The program emphasizes enhanced coordination and integration with mainstream resources and other programs specifically aimed at assisting those experiencing homelessness. By improving data collection and performance measurement, the CoC Program ensures accountability and continuous improvement. Furthermore, it empowers each community to tailor its programs, allowing for customized solutions that leverage local strengths and address unique challenges in assisting their homeless populations.

Who Can Apply for CoC Program Funding? Eligible Applicants

Eligibility for CoC Program funding is clearly defined to ensure resources are directed to capable and relevant organizations. As detailed in the CoC Program interim rule, eligible applicants include a range of entities committed to addressing homelessness:

Nonprofit Organizations: Community-based nonprofits with a mission focused on housing and supportive services are primary applicants.
State Governments: State-level agencies can apply to implement statewide homelessness initiatives.
Local Governments: City and county governments are critical applicants, addressing homelessness within their jurisdictions.
Instrumentalities of State or Local Governments: Public housing authorities and similar governmental bodies are also eligible.

It’s important to note that for-profit entities are not eligible to directly apply for CoC Program grants or to serve as subrecipients of grant funds, ensuring the program’s focus remains on public benefit and nonprofit missions.

Funding is awarded through an annual competitive process managed by HUD. To apply, eligible organizations must submit a project application to the CoC’s designated Collaborative Applicant organization. Each CoC designates a single Collaborative Applicant, which acts as the central coordinating body. This Collaborative Applicant is responsible for compiling and submitting the complete application package to HUD, including the CoC application itself, individual project applications from local organizations, and project rankings determined at the local level. This structure streamlines the application process and ensures local coordination in addressing homelessness.

Core Components of the CoC Program

The CoC Program is structured around five core program components, each designed to address different aspects of homelessness and housing needs. These components are outlined in the CoC Program interim rule and provide a framework for how funds can be utilized:

Permanent Housing (PH): Providing long-term housing solutions for formerly homeless individuals and families.
Transitional Housing (TH): Offering temporary housing and supportive services to help individuals move to permanent housing.
Supportive Services Only (SSO): Funding for essential support services, particularly for coordinated entry processes.
Homeless Management Information System (HMIS): Supporting data collection and management to improve service delivery and program effectiveness.
Homelessness Prevention (HP): In specific communities, funding can be used to prevent individuals and families at risk of homelessness from losing their housing.

Administrative costs are recognized as eligible expenses across all program components, acknowledging the necessary overhead in managing these complex programs.

The CoC Program components are intentionally aligned with those of the Emergency Solutions Grants (ESG) program where feasible. This consistency aims to reduce administrative complexities for organizations managing both types of funding and ensures uniform reporting standards and data quality benchmarks across similar projects. A key difference between the ESG Program and the CoC Program lies in the specific eligible activities and administrative requirements for rapid re-housing assistance, as detailed in the interim rule.

Let’s delve into each of the five core components of the CoC Program:

Permanent Housing (PH)

Permanent Housing (PH) is defined as community-based housing without limitations on length of stay, designed to foster independent living for individuals and families who were formerly homeless. A key feature of PH is that program participants must be tenants with a lease (or sublease) for an initial term of at least one year, renewable and terminable only for cause. These leases must also be renewable for minimum terms of one month thereafter, ensuring housing stability.

The CoC Program supports two primary types of permanent housing:

Permanent Supportive Housing (PSH): This is permanent housing combined with ongoing supportive services for individuals with disabilities or families with a disabled member. PSH aims to help these vulnerable populations achieve and maintain housing stability and improve their quality of life. The rental assistance and supportive services are indefinite, recognizing the long-term needs of this population.
Rapid Re-housing (RRH): Rapid Re-housing focuses on quickly moving homeless individuals and families (with or without disabilities) into permanent housing. RRH provides housing search and relocation services along with short- to medium-term rental assistance to overcome immediate housing barriers and promote swift transitions to permanent housing.

Transitional Housing (TH)

Transitional Housing (TH) serves as an intermediate step, offering homeless individuals and families temporary stability and support services to facilitate their successful transition to permanent housing. TH projects can cover housing costs and associated supportive services for up to 24 months. During their stay in transitional housing, program participants must have a lease (or sublease) or occupancy agreement, ensuring their rights and responsibilities as residents are clearly defined. Transitional housing acts as a bridge, providing a structured environment and support system to prepare individuals and families for independent living in permanent housing.

Supportive Services Only (SSO)

The Supportive Services Only (SSO) component has a specific focus: it provides funding exclusively to the entity designated by the CoC to lead the community’s coordinated entry (CE) process. HUD mandates that each CoC establish and operate a coordinated entry process. This process is designed to streamline local crisis response systems, making it easier for individuals experiencing homelessness to access resources, including mainstream services.

SSO-Coordinated Entry (SSO-CE) grants fund a range of supportive services directly related to CE activities. These activities include:

Outreach: Actively reaching out to unsheltered and sheltered homeless individuals and families to connect them with assistance.
Initial Assessment: Conducting assessments to understand the needs and vulnerabilities of individuals experiencing homelessness.
Crisis Counseling: Providing immediate support and counseling during crisis situations.
Addressing Urgent Physical Needs: Meeting immediate needs like food, clothing, and hygiene.
Housing and Resource Connection: Connecting individuals with housing options and other relevant resources.

While SSO grants are now specifically targeted for CE Lead Agencies, other recipients and subrecipients can still receive supportive service funds to provide services to homeless individuals and families who are not residing in housing directly operated by the recipient. These supportive services can be delivered in centralized locations, scattered sites, or even through street outreach programs, offering flexibility to meet diverse community needs.

Homeless Management Information System (HMIS)

Funding under the Homeless Management Information System (HMIS) component is restricted to HMIS Lead Agencies. The HMIS Lead Agency is designated by the CoC to manage and operate the CoC’s HMIS on its behalf. The HMIS is a critical tool for data collection and analysis, enabling communities to better understand the scope of homelessness, track service utilization, and measure program outcomes.

HMIS funds can be used for various costs associated with operating the HMIS, including:

Leasing and Operating a Physical Structure: Covering costs for a physical location to house HMIS operations.
Establishing, Operating, and Customizing the HMIS: Funding software, hardware, customization, and ongoing operational costs of the HMIS.

While other recipients and subrecipients cannot apply for direct HMIS funding, they can include HMIS-related costs within their projects under other components (PH, TH, SSO, or HP). This allows them to cover expenses associated with contributing data to the CoC’s HMIS, ensuring data quality and comprehensiveness across the CoC.

Homelessness Prevention (HP)

The Homelessness Prevention (HP) component of the CoC Program offers a proactive approach to combating homelessness. However, access to HP funding is currently limited to recipients and subrecipients located in HUD-designated High Performing Communities (HPCs). HPC designation is outlined in the annual CoC Program Notice of Funding Opportunity (NOFO).

Homelessness prevention services aim to assist individuals and families who are at imminent risk of homelessness. These services may include:

Housing Relocation and Stabilization Services: Assistance to help individuals maintain their current housing or move to new permanent housing.
Short- and Medium-Term Rental Assistance: Temporary rental subsidies to prevent eviction and housing loss.

Through the HP component, recipients and subrecipients can intervene early to prevent homelessness, helping at-risk individuals and families maintain stable housing situations or transition to new permanent housing before homelessness occurs. Homelessness prevention activities must be administered in accordance with 24 CFR part 576, ensuring compliance and program integrity.

Program Components No Longer Available for New Projects

It’s important to note that some program components, while historically part of the CoC Program, are no longer available for new projects but may continue to be funded for existing projects:

Safe Havens

The Safe Haven program component is no longer eligible for new projects under the CoC Program. While no new Safe Haven projects will be funded, existing Safe Haven projects may be renewed to continue receiving funding for ongoing leasing, operations, supportive services, rental assistance, HMIS operation, and administrative functions. This ensures continuity for existing projects that provide a critical service model.

Section 8 Moderate Rehabilitation SRO

Similarly, the Section 8 Moderate Rehabilitation SRO Program component is also no longer eligible for new projects. No new SRO projects will be funded under the CoC Program. However, current SRO projects will continue to be renewed under the Multifamily Assisted Housing Reform and Affordability Act of 1997, maintaining support for this existing housing resource.

Understanding Eligible Costs Under the CoC Program

The CoC Program interim rule clearly defines eligible costs for each program component, ensuring funds are used appropriately and effectively. It’s crucial to understand that not all costs are eligible under every component, and certain cost combinations within a single unit or structure may be restricted. Importantly, costs associated with contributing data to the CoC-designated HMIS are eligible across all program components, highlighting the program’s emphasis on data-driven approaches.

Here’s a summary of the eligible cost categories within the CoC Program:

Acquisition

Acquisition of real property is an eligible cost under the PH, TH, and SSO components. CoC Program funds can cover up to 100% of the cost of purchasing property for permanent housing, transitional housing, or supportive services only activities. This allows organizations to secure property necessary for program implementation.

Rehabilitation

Rehabilitation of existing structures is eligible under PH, TH, and SSO components. Eligible rehabilitation costs include essential upgrades such as installing energy-saving measures and bringing properties up to health and safety standards. However, rehabilitation on leased properties is not eligible, focusing funding on properties owned or to be owned by program operators or partners.

New Construction

New construction of structures is eligible under the PH and TH components. This can include building entirely new facilities or adding significant expansions (100% or more increase in floor area) to existing structures. Land acquisition for new construction is also eligible. Projects pursuing new construction must demonstrate that it is more cost-effective than rehabilitation, ensuring responsible use of funds. Similar to rehabilitation, new construction on leased properties is ineligible. The CoC Program interim rule removes previous grant limits for rehabilitation and new construction, allowing for up to 100% funding as long as matching requirements are met through other sources.

Leasing Costs

Leasing is an eligible cost across PH, TH, SSO, and HMIS components. Funds can be used to lease individual housing units or entire structures or portions of structures. Rents must be reasonable and, for individual units, cannot exceed HUD-determined Fair Market Rents (FMRs). There are restrictions on leasing from related parties (recipient, subrecipient, parent organizations, or partnership members) without HUD authorization to prevent conflicts of interest. When leasing units, the lease must be between the recipient/subrecipient and the landowner, with a sublease or occupancy agreement for the program participant. Recipients have the option, but are not required, to charge program participants rent or occupancy charges, following interim rule guidelines.

Rental Assistance Costs

Rental assistance is an eligible cost under PH and TH components and can be tenant-based (TBRA), sponsor-based (SBRA), or project-based (PBRA), depending on the component type. Rental assistance can be short-term (up to 3 months), medium-term (3 to 24 months), or long-term (over 24 months), with the duration varying by component. Recipients must serve the number of participants outlined in their HUD application. If funds reserved for the grant term exceed actual rental costs, the excess can be used for property damage, rent increases, or to serve more participants.

Tenant-Based Rental Assistance (TBRA): Participants can choose any suitable unit within the CoC’s geographic area, although location restrictions may apply to ensure access to supportive services.
Sponsor-Based Rental Assistance (SBRA): Participants reside in housing owned or leased by a sponsor organization, arranged through a contract with the recipient.
Project-Based Rental Assistance (PBRA): Participants live in housing under contract with a property owner who agrees to lease subsidized units to program participants. Rental assistance is tied to the project and not portable if participants relocate outside the project.

When rental assistance funds are used, the lease must be between the program participant and the landowner. Participants are required to contribute towards rent, consistent with interim rule requirements, promoting tenant responsibility and program sustainability.

Supportive Services Costs

Supportive services are eligible costs under PH, TH, and SSO components. The CoC Program interim rule specifies all eligible services, and any service not listed is ineligible, ensuring focused service delivery. Services must be provided to residents of PSH and TH for their entire residency. RRH programs must require at least monthly case manager meetings for participants, ensuring ongoing support.

Services can continue for up to six months after a participant exits homelessness, including after exiting transitional housing. Recipients and subrecipients must conduct annual service needs assessments and adjust services accordingly to meet evolving needs. Eligible costs include service provision costs, staff salaries and benefits for service providers, and materials and supplies used in service delivery, supporting comprehensive service provision.

Operating Costs

Operating costs are eligible under PH, TH, and HMIS components. Funds can cover day-to-day operating expenses in single structures or individual housing units, including maintenance (scheduled system replacements), repairs, building security (if CoC funds cover over 50% of the facility), utilities (electricity, gas, water), furniture, equipment, property insurance, and taxes. Operating costs cannot be combined with rental assistance within the same unit or structure, and they are not eligible under the SSO component, maintaining distinct funding streams for housing and services.

HMIS Costs

Costs related to contributing client data to or maintaining data in the CoC’s HMIS (or comparable databases for victim services or legal services providers) are eligible under PH, TH, SSO, and HMIS components. Eligible HMIS costs include hardware, software, equipment, training, overhead, and staffing costs directly related to HMIS data contribution. This underscores the importance of data collection and management across all CoC Program activities.

Project Administration

Recipients and subrecipients can use up to 10% of any grant (excluding CoC planning and UFA costs) for project administrative costs, as outlined in the CoC Program NOFO. These costs cover overall grant administration (24 CFR part 578.59), including management, coordination, monitoring, evaluation, and environmental reviews, ensuring effective grant management and compliance.

CoC Planning Costs

CoC Planning funds are exclusively for the CoC’s designated Collaborative Applicant and are awarded through a specific CoC Planning grant. These funds must be used for activities specified in the interim rule, such as:

Developing community-wide or region-wide coordination processes involving stakeholders and individuals with lived experience of homelessness.
Designing (but not implementing) coordinated entry processes.
Evaluating outcomes for CoC Program and ESG-funded projects.
Preparing and submitting the annual HUD application on behalf of the CoC.
Monitoring recipients and subrecipients and enforcing program compliance.

These planning funds support the essential coordination and strategic development work of the Collaborative Applicant.

Unified Funding Agency (UFA) Costs

UFA costs funds are available only to Collaborative Applicants designated as a Unified Funding Agency (UFA) by HUD through the annual NOFO process, awarded through a specific UFA Costs grant. These funds are for costs associated with ensuring sound financial management of the CoC Program, including annual surveys, audits, or evaluations of the financial records of each subrecipient project. UFA costs enhance financial accountability and program integrity within CoCs.

By understanding the intricacies of the Continuum Of Care Homeless Assistance Program, communities and organizations can effectively leverage its resources to address homelessness comprehensively, fostering long-term solutions and improved lives for individuals and families in need.