The federal government has announced a new approach to addressing homelessness, substance use disorders, and serious mental illness. Known as “Treatment First,” the policy is intended to connect housing assistance more closely with behavioral health treatment, recovery services, and pathways toward self-sufficiency.
Here is what you need to know.
What Is “Treatment First”?
In August 2026, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Health and Human Services (HHS), and the White House Office of National Drug Control Policy introduced the first federal Treatment First Best Practices Toolkit.
The toolkit provides guidance for state and local governments, housing organizations, treatment providers, and community partners serving people experiencing both homelessness and substance use or mental health challenges.
Under this approach, housing would be paired with services such as:
- Mental health and substance use treatment
- Recovery support
- Street outreach and coordinated care
- Employment and job-readiness assistance
- Case management and other supportive services
Federal officials describe the goal as helping people move from homelessness into recovery, stable housing, and greater independence. Read HUD’s announcement.
How Is This Different From “Housing First”?
Housing First generally prioritizes helping a person obtain permanent housing without requiring participation in treatment or sobriety as a condition of receiving housing assistance. Supportive services are offered, but participation is typically voluntary.
Treatment First places greater emphasis on participation in treatment, recovery, and supportive services as part of the response to homelessness. HHS and HUD have indicated that future federal homelessness programs—including aspects of HUD’s Continuum of Care Program—may be more closely aligned with this approach. Read the joint HHS and HUD announcement.
What Could This Mean for Chicago?
The immediate local effects are not yet fully known. Additional federal guidance and future funding notices will help determine how the policy affects Chicago’s homelessness-response system.
Housing agencies and service providers should watch for possible changes involving:
- Federal grant requirements and funding priorities
- Coordination between housing and behavioral health providers
- Expectations related to treatment and recovery services
- Program performance and accountability measures
- Eligibility or participation requirements for federally funded programs
Organizations receiving or applying for federal homelessness funding may need to review their program models and strengthen partnerships with health care, behavioral health, workforce-development, and recovery-service providers.
CLIHTF’s Perspective
CLIHTF recognizes that people experiencing homelessness may face a wide range of circumstances. Some individuals need behavioral health or recovery services, while others primarily need affordable housing, income support, or assistance overcoming an unexpected financial crisis.
Stable housing and supportive services can work together, but solutions must remain responsive to each household’s individual needs. As federal policies continue to develop, CLIHTF will monitor their potential impact on Chicago’s affordable-housing system and the community partners working to help residents achieve long-term stability.
The most important takeaway is that Treatment First represents a significant change in federal homelessness policy, but many implementation details are still developing. Housing providers, service organizations, and community stakeholders should remain informed as additional requirements and funding guidance are released.