Understanding the Continuum of Care (CoC) Program: A Comprehensive Guide

The Continuum of Care (CoC) Program stands as a cornerstone initiative by the U.S. Department of Housing and Urban Development (HUD), meticulously crafted to address the multifaceted crisis of homelessness across the nation. This program is fundamentally designed to support individuals and families, including unaccompanied youth, who are experiencing homelessness. It aims to provide not just immediate shelter, but a comprehensive suite of services essential for transitioning individuals from homelessness to stable, permanent housing and fostering long-term self-sufficiency.

More than just a housing program, the CoC Program embodies a strategic, community-centric approach to combating homelessness. It strongly encourages and facilitates community-wide planning and the judicious allocation of resources. The program’s framework is built to enhance coordination and integration between mainstream support systems and various programs specifically designed for people facing homelessness. By improving data collection and performance measurement, the CoC Program enables communities to effectively monitor progress and refine their strategies. Crucially, it empowers each community to tailor its programs, allowing for flexibility and responsiveness to the unique strengths and challenges inherent in their local context when assisting individuals and families experiencing homelessness.

Who Can Apply for CoC Program Funding? Understanding Eligible Applicants

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

Nonprofit Organizations: These form the backbone of many homelessness service networks, offering direct services and community support.
States: State governments play a crucial role in overseeing and coordinating homelessness initiatives across broader regions.
Local Governments: Cities and counties are at the forefront of addressing homelessness within their jurisdictions, making them key applicants.
Instrumentalities of State or Local Governments: This category encompasses public housing authorities and other governmental bodies equipped to implement housing and support programs.

It’s important to note that for-profit entities are explicitly ineligible to apply for CoC Program grants or to serve as subrecipients of grant funds. This restriction ensures that the program’s focus remains on mission-driven organizations dedicated to public service rather than commercial interests.

The process for organizations to secure HUD funding involves an annual competitive application. An organization that meets the eligibility criteria must submit a project application to the Collaborative Applicant designated by their local CoC. Each CoC appoints a single organization to act as the Collaborative Applicant. This Collaborative Applicant is responsible for compiling and submitting the complete application package to HUD. This package includes not only the CoC application itself, which outlines the community’s overall strategy and needs, but also all individual project applications submitted by local organizations, along with the CoC’s prioritized ranking of these projects. This system ensures a coordinated, community-wide approach to funding allocation.

Decoding the CoC Program Components: A Range of Housing and Service Options

The CoC Program is structured around five core program components, each designed to address different facets of homelessness and provide tailored support. These components, as outlined in the CoC Program interim rule, are:

Permanent Housing (PH)
Transitional Housing (TH)
Supportive Services Only (SSO)
Homeless Management Information System (HMIS)
Homelessness Prevention (in specific cases)

Notably, administrative costs are eligible across all of these components, recognizing the necessary overhead involved in managing and implementing these complex programs.

The design of these components is intentionally aligned with those of the Emergency Solutions Grants (ESG) program wherever feasible. This consistency aims to streamline administration for organizations that receive funding from both programs, reducing bureaucratic burden and ensuring uniform reporting standards and data quality benchmarks across similar project types. However, it is crucial to distinguish between the ESG Program and the CoC Program, particularly regarding eligible activities and administrative requirements within the rapid re-housing component, as detailed in the interim rule.

Let’s delve deeper into each of these five key program components:

Permanent Housing (PH): The Goal of Long-Term Stability

Permanent housing (PH) represents the ultimate goal for many experiencing homelessness: stable, long-term accommodation. It is defined as community-based housing without a set limit on length of stay, designed to enable formerly homeless individuals and families to live as independently as possible. Under the PH framework, a program participant must be the leaseholder (or sub-leaseholder) with an initial lease term of at least one year, renewable and terminable only for legitimate cause. These leases must also be renewable for minimum terms of one month thereafter, ensuring ongoing housing security.

The CoC Program funds two primary types of permanent housing interventions:

Permanent Supportive Housing (PSH): This model is specifically for individuals with disabilities experiencing chronic homelessness, and families where at least one adult or child member has a disability. PSH combines permanent housing with indefinite rental assistance and intensive supportive services. These services are designed to help individuals and families not only secure housing but also achieve and maintain housing stability long-term, addressing the complex needs often associated with disability and chronic homelessness.
Rapid Re-housing (RRH): Rapid re-housing is designed to swiftly move individuals and families (with or without disabilities) out of homelessness and into permanent housing. RRH emphasizes housing search and relocation services and provides short- to medium-term rental assistance. The core principle is to minimize the duration of homelessness by quickly connecting people with housing and the necessary supports to sustain it.

Transitional Housing (TH): A Stepping Stone to Permanence

Transitional housing (TH) serves as an essential interim step for individuals and families experiencing homelessness. It is designed to offer temporary stability and support, equipping residents with the resources and skills needed to successfully transition to and maintain permanent housing. CoC Program funds can cover the costs of transitional housing for up to 24 months, along with accompanying supportive services. During their stay in transitional housing, program participants must have a lease (or sublease) or formal occupancy agreement, ensuring their rights and responsibilities are clearly defined.

Supportive Services Only (SSO): Coordinated Entry and Essential Support

The Supportive Services Only (SSO) component plays a unique and critical role within the CoC Program. Funding under this component is exclusively available to the entity designated by the CoC to lead its coordinated entry process. HUD mandates that every CoC establish and operate a coordinated entry process. This centralized system is crucial for streamlining local crisis response systems and simplifying access to resources, including mainstream services, for individuals experiencing homelessness.

Funds awarded through a Supportive Services Only – Coordinated Entry (SSO-CE) grant are specifically used to support activities that directly facilitate the coordinated entry process. These activities include:

Outreach: Actively reaching out to both sheltered and unsheltered homeless individuals and families to connect them with services. This includes initial assessments to understand their needs, crisis counseling to address immediate distress, and attending to urgent physical needs like food and shelter.
Connection to Housing and Resources: Linking individuals experiencing homelessness with appropriate housing options and a wide range of other necessary resources, such as healthcare, mental health services, substance abuse treatment, and employment assistance.

While general SSO grants are no longer available to entities that are not the CE Lead Agency, it’s important to note that recipients and subrecipients can still receive supportive services funds to provide crucial assistance to homeless individuals and families who are not residing in housing directly operated by the recipient organization. These supportive services can be delivered in various settings: in centralized facilities, across multiple scattered sites, through street outreach programs independent of any building, and in collaboration with other community-based organizations, including other homeless service providers. This flexibility ensures that support reaches people wherever they are and in the most effective way possible.

Homeless Management Information System (HMIS): Data-Driven Solutions

The Homeless Management Information System (HMIS) component is vital for data collection and informed decision-making in addressing homelessness. Funding under this component is strictly limited to HMIS Lead Agencies, which are designated by each CoC to operate the CoC’s HMIS on its behalf.

HMIS funds are used to support the infrastructure and operations of the HMIS itself. This can include:

Leasing and Operating HMIS Structures: Covering the costs of leasing or operating physical spaces where the HMIS is managed and maintained.
HMIS Establishment, Operation, and Customization: Funding the setup, ongoing operation, and tailoring of the HMIS to meet the specific needs of the CoC and its community. This includes software, hardware, and technical support.

It is crucial to understand that other recipients and subrecipients cannot directly apply for HMIS program component funds. However, they are permitted to incorporate costs associated with contributing data to the CoC’s HMIS within their project budgets under other program components (PH, TH, SSO, or HP). This ensures that all funded projects contribute to the comprehensive data system, even if they are not directly managing the HMIS.

Homelessness Prevention: Stopping Homelessness Before It Starts

The Homelessness Prevention component is a proactive approach, focusing on intervening before individuals and families become homeless. Currently, access to this component is specifically for recipients and subrecipients located within HUD-designated High Performing Communities (HPCs). The annual CoC Program Notice of Funding Opportunity (NOFO) provides updated details on how CoCs can apply for HPC designation and access homelessness prevention funds.

Services funded under this component are designed to help individuals and families at risk of homelessness maintain their current housing or transition to new permanent housing. These services can include:

Housing Relocation and Stabilization Services: Assistance with moving costs, security deposits, and other expenses related to securing or maintaining housing.
Short- and Medium-Term Rental Assistance: Temporary financial aid to help families and individuals pay rent and avoid eviction, giving them time to stabilize their financial situation.

Homelessness prevention activities funded by the CoC Program must be administered in strict accordance with 24 CFR part 576, ensuring compliance and effective use of resources.

Other Components: Historical Context and Current Status

While the five components detailed above represent the core of the CoC Program, it’s important to acknowledge the historical context and current status of two other components that were previously part of homelessness initiatives but are no longer actively funded for new projects under the CoC Program:

Safe Havens: Renewals but No New Projects

The Safe Haven program component is no longer eligible for new projects under the CoC Program. However, recognizing the ongoing need for specialized services for certain chronically homeless populations, the CoC Program interim rule explicitly allows for the renewal of existing Safe Haven projects. These renewals enable continued funding for leasing, operations, supportive services, rental assistance, HMIS operation, and administrative functions for projects that were eligible under the McKinney-Vento Act before the HEARTH Act passage. The annual CoC Program Notice of Funding Opportunity (NOFO) provides further details regarding the renewal process for Safe Haven projects.

Section 8 Moderate Rehabilitation SRO: Phased Out for New Funding

Similar to Safe Havens, the Section 8 Moderate Rehabilitation SRO (Single Room Occupancy) Program component is no longer eligible for new projects within the CoC Program. No new SRO projects will receive CoC funding. However, existing SRO projects continue to be renewed under the Multifamily Assisted Housing Reform and Affordability Act of 1997, ensuring continued support for this type of housing for low-income individuals.

Understanding Eligible Costs: How CoC Program Funds Can Be Used

The CoC Program interim rule meticulously outlines the types of costs that are eligible for funding under each program component. It is crucial to note that not all costs are eligible under every component, and in some instances, certain cost categories cannot be combined within a single unit or structure. However, costs associated with contributing data to the CoC’s designated HMIS are eligible across all components, underscoring the importance of data collection.

Here is a summary of the key eligible cost categories:

Acquisition: Purchasing Property for Program Use

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

Rehabilitation: Improving Existing Structures

Rehabilitation of existing structures is eligible under the PH, TH, and SSO components. Eligible rehabilitation costs include essential improvements such as:

Installing cost-saving energy measures: Enhancing energy efficiency and reducing operating costs long-term.
Bringing structures up to health and safety standards: Ensuring safe and habitable living environments for program participants.

Importantly, rehabilitation on leased properties is not eligible for CoC Program funding.

New Construction: Building New Housing Units

New construction of structures is eligible under both the PH and TH program components. This can include:

Building entirely new facilities: Creating new housing units from the ground up.
Constructing additions: Expanding existing structures by adding floor area that increases the total by 100% or more.
Land acquisition for construction: Covering the cost of land needed for new construction projects.

Projects involving new construction must demonstrate that this approach is more cost-effective than rehabilitation. Unlike previous regulations, the CoC Program interim rule does not impose maximum grant limits for rehabilitation or new construction, allowing for projects to be tailored to community needs and costs. CoC Program funds can cover up to 100% of eligible new construction costs, provided the required matching funds are secured from other sources. Similar to rehabilitation, new construction on leased properties is not eligible.

Leasing Costs: Renting Properties for Program Operations

Leasing is an eligible cost category under the PH, TH, SSO, and HMIS program components. Funds can be used to lease:

Individual housing units: Securing apartments or houses for program participants.
Entire structures or parts of structures: Leasing buildings to operate program facilities, including HMIS offices.

Rents must be reasonable and, in the case of individual units, cannot exceed HUD-determined Fair Market Rents (FMRs). To prevent conflicts of interest, leasing funds generally cannot be used for units or structures owned by the recipient, subrecipient, their parent organization(s), related organizations, or organizations that are part of a partnership that owns the structure, unless a specific exception is authorized by HUD.

When leasing funds are used to pay rent for units, the lease must be between the recipient or subrecipient and the property owner. A sublease or occupancy agreement is then established with the program participant. Recipients have the discretion to charge program participants rent or an occupancy charge, consistent with the parameters outlined in the interim rule.

Rental Assistance Costs: Direct Housing Subsidies

Rental assistance is a key eligible cost under the PH and TH components. It can take three forms, depending on the program model:

Tenant-Based Rental Assistance (TBRA): Participants can choose any suitable unit within the CoC’s geographic area. While there is flexibility, recipients or subrecipients may place location restrictions in certain cases to ensure access to necessary supportive services.
Sponsor-Based Rental Assistance (SBRA): Participants must reside in housing owned or leased by a sponsor organization, arranged through a contract between the recipient and the sponsor.
Project-Based Rental Assistance (PBRA): Participants reside in housing within a specific project, where the owner has contracted to lease subsidized units to program participants. Rental assistance is tied to the project, meaning participants cannot retain the assistance if they move outside the designated project units.

Rental assistance can be short-term (up to 3 months), medium-term (3 to 24 months), or long-term (more than 24 months), depending on the specific component. Recipients are required to serve the number of program participants outlined in their HUD funding application. If the allocated funds exceed actual rental assistance costs, the surplus can be used for property damage coverage, rent increases, or to serve a larger number of participants.

When rental assistance funds are used, the lease for the unit must be between the program participant and the property owner. Program participants are required to contribute towards rent, in accordance with the interim rule’s requirements.

Supportive Services Costs: Enabling Housing Stability

Supportive services are eligible costs under the PH, TH, and SSO program components. The CoC Program interim rule provides a comprehensive list of eligible services, and it is critical to note that any service not explicitly listed is considered ineligible. Services must be consistently offered to residents of PSH and TH throughout their residency. RRH programs must ensure that program participants meet with a case manager at least monthly to maintain support and progress towards housing stability.

Supportive services can also be provided to formerly homeless individuals for up to six months after they exit homelessness, including the six months following their exit from a transitional housing project. Recipients and subrecipients are required to conduct an annual assessment of the service needs of their program participants and adjust service delivery accordingly to ensure responsiveness to evolving needs. Eligible costs include:

Direct service provision costs.
Salaries and benefits of staff directly providing services.
Materials and supplies used in service delivery.

Operating Costs: Maintaining Housing and Facilities

Operating costs are eligible under the PH, TH, and HMIS program components. These funds cover the day-to-day expenses of running housing facilities or individual units, and HMIS operations. Eligible operating costs include:

Maintenance: Regular upkeep, including scheduled replacement of major systems (e.g., HVAC, plumbing).
Repair: Addressing damages and ensuring units remain habitable.
Building security: When CoC Program funds cover more than 50% of the facility costs (by unit or area).
Utilities: Electricity, gas, water.
Essential Furnishings and Equipment: Furniture, appliances, etc.
Property insurance.
Property taxes.

It’s important to note that operating costs cannot be combined with rental assistance costs within the same housing unit or structure. Furthermore, operating costs are not eligible under the SSO program component.

HMIS Costs: Supporting Data Infrastructure

Costs directly related to contributing client data to or maintaining data within the CoC’s HMIS (or comparable databases for victim services or legal services providers) are eligible under the PH, TH, SSO, and HMIS program components. Eligible HMIS costs encompass:

Hardware, equipment, and software costs: Technology infrastructure for HMIS.
Training: Staff training on HMIS usage and data entry.
Overhead: Indirect costs associated with HMIS operation.
Staffing costs: Salaries and benefits for staff dedicated to HMIS data management within projects.

Project Administration: Managing Grant Implementation

Recipients and subrecipients are permitted to use up to 10% of any CoC Program grant (excluding CoC planning and Unified Funding Agency (UFA) costs) for project administrative costs. These costs cover the overall administration of the grant and related project activities (as defined in 24 CFR part 578.59), including:

Management and supervision.
Coordination of project activities.
Monitoring and oversight.
Project evaluation activities.
Environmental review.

CoC Planning Costs: Strategic Community-Wide Planning

CoC Planning funds are exclusively for use by the CoC’s designated Collaborative Applicant. These funds are awarded through a specific CoC Planning grant and must be used for activities that enhance community-wide strategic planning to address homelessness. Eligible activities include:

Developing community or region-wide processes: Fostering collaboration among stakeholders, including individuals with lived experience of homelessness.
Designing a coordinated entry process: Planning and developing the CE system (but not implementing it, as implementation is funded under SSO-CE).
Evaluating project outcomes: Assessing the effectiveness of CoC Program and Emergency Solutions Grant (ESG) program funded projects.
Preparing and submitting the annual CoC application to HUD: The comprehensive application process on behalf of the entire CoC.
Monitoring recipients and subrecipients: Ensuring compliance with program requirements and effective use of funds.

Unified Funding Agency (UFA) Costs: Financial Oversight and Accountability

UFA costs are specifically for Collaborative Applicants that HUD has designated as a Unified Funding Agency (UFA) through the annual NOFO process. These funds are awarded through a dedicated UFA Costs grant and are intended to support robust financial management and accountability within the CoC. UFA funds can be used for costs associated with:

Ensuring sound financial practices: Implementing and maintaining financial transaction processes and record-keeping in accordance with generally accepted accounting principles.
Arranging for annual financial audits: Conducting surveys, audits, or evaluations of the financial records of each subrecipient project funded through the CoC Program, ensuring fiscal responsibility and transparency.

By understanding these components and eligible costs, organizations can effectively navigate the CoC Program and leverage its resources to make a significant impact on homelessness in their communities.