As the year ends and we reflect back on Homelessness Awareness Month, the Chicago Low-Income Housing Trust Fund (CLIHTF) is closely watching a major federal policy change. On November 13, 2025, HUD released the FY 2025 competition Notice of Funding Opportunity (NOFO) for the Continuum of Care Program (CoC). Under this new NOFO, CoCs will face a strict cap: no more than 30% of funding can be used for permanent housing — a stark departure from recent years where the majority of funding went toward long-term, housing-first solutions.
What Changed: A Shift Away from Housing First
• Historically, CoC allocations strongly favored permanent housing — including permanent supportive housing (PSH), rapid re-housing (RRH), and other long-term rental assistance — because these interventions offer stability and an evidence-based path out of homelessness.
• The new NOFO restructures funding tiers: the previously protected “Tier 1” renewals have been reduced dramatically, and a rigid 30% cap for permanent housing renewals now applies. This threatens to push many existing permanent housing contracts into a competitive, uncertain funding Tier.
• Across the country, analysts now warn that up to 170,000 formerly homeless individuals and families could lose access to stable housing support under the new rules.
Why This Matters for Chicago — and for CLIHTF
At CLIHTF, our mission is clear: to provide low-income Chicagoans — often people living on fixed incomes, seniors, people with disabilities, working families, and those formerly experiencing homelessness — with access to stable, quality, safe, affordable housing.
• Many households depend on long-term rental subsidies to remain housed. If CoC-funded supportive housing is dismantled or drastically reduced, these households could lose their homes.
• The loss of permanent supportive housing risks destabilizing families and individuals who rely not only on a roof over their heads, but also on wrap-around social services, healthcare access, and long-term stability.
• The strain will ripple across the broader housing ecosystem — shelters, emergency services, and other support systems may face increased demand, while affordable housing remains scarce.
CLIHTF’s Commitment: Advocacy, Support, & Vigilance
CLIHTF has always served as a bridge between low-income households and stable housing — through rental subsidies, partnerships with landlords, and support for households earning at or below 30% of Area Median Income (AMI).
Now more than ever:
• We will monitor the implementation of HUD’s new NOFO closely &assess its local impact.
• We stand ready to assist tenants, landlords, and service providers who may be at risk — whether through information, referrals, or coordination with legal and social-service partners.
• We will continue investing in our own rental subsidy programs and affordable housing initiatives to protect and expand housing stability for Chicago’s most vulnerable residents.
What You Can Do — Stay Engaged. Stay Informed. Stay in Touch.
• Watch this blog: we will publish updates as we learn more about the impact of HUD’s changes on Chicago and on CoCs statewide.
• If you are a tenant, landlord, housing provider, or community partner — reach out to CLIHTF. We may be able to support, refer, or assist as needed.
• Spread the word: changes to federal funding don’t just stay in Washington — they affect real homes, families, and neighborhoods here in Chicago.
Thank you for standing with us. Together, we’ll continue working to defend affordable housing and advance housing justice for all Chicagoans.
