HUD published a notice of research supporting a shift in CoC funding priorities toward transitional housing, supportive services, recovery-oriented housing, service engagement requirements, and public safety partnerships. HUD is taking public comment on incentives for these activities in the annual CoC applications=. Any organization or individual can comment, and comments are due by 11:59 PM ET on Tuesday, October 13.

Read the notice: https://www.federalregister.gov/d/2026-18555

Submit a comment: https://www.regulations.gov/commenton/HUD-2026-1453-0001

On September 18, HUD waived 24 CFR 578.51(b), which allows nonprofit applicants, recipients, and subrecipients funded under the FY 2026 CoC NOFO to administer rental assistance in transitional housing (TH). Because this action came just 12 days before our Consolidated Application was due to HUD, there was insufficient time to retool all TH project applications.  Our team is working on the best path forward to enable agencies that want to take advantage of this opportunity to do so.  Please stay tuned for more information!

On September 30, the National Alliance to End Homelessness and the plaintiff states (including Connecticut) filed new motions in the Rhode Island district court arguing that the $1.3 billion set-aside and other NOFO provisions exceed HUD’s statutory authority and are arbitrary and capricious. They are no longer asking the court to throw out the whole NOFO. Instead, they are asking it to strike the challenged provisions and leave the rest in place. HUD would make Tier 1 awards by 12/1/26 from the applications already submitted, and open a new application period for Tier 2 without the set-aside. If the court needs more time to decide, NAEH asked it to pause all awards in the meantime. The court is expected to rule after October 14.  For now, nothing changes: the applications submitted on September 30 stand, and HUD can keep reviewing them under the current NOFO unless the court orders otherwise. No action is needed from providers at this time.

In November 2025, HUD issued a notice classifying the entire CoC program as a “federal public benefit” under PRWORA, which would have required immigration status verification across CoC projects. On September 21, the Rhode Island district court struck down that notice, along with a DOJ notice that had revoked the long-standing “life or safety” exemptions. Connecticut is a plaintiff, so the HUD notice was never enforced here. With the notices vacated, CoC projects are back under HUD’s 2016 guidance.

By project type:

• Street Outreach: not subject to immigration-based restrictions. Serve people regardless of status.
• Rapid Re-Housing: not subject to immigration-based restrictions. Serve people regardless of status.
• Transitional Housing: exempt when the recipient or subrecipient owns or leases the building, TH that pays rental assistance on behalf of participants is not covered by the exemption.
• Permanent Supportive Housing: not on HUD’s list of exempt project types. HUD has not put a verification process in place.
• SSO Coordinated Entry: not addressed by name in HUD’s guidance. With the notice vacated, there is no HUD requirement to screen for immigration status at coordinated entry.
• For all project types, PRWORA does not require nonprofit organizations to verify immigration status.

In practice, this means intake and eligibility practices do not need to change from what they were before November 2025. Two cautions: the administration may appeal, and the court left HUD free to try again through formal rulemaking with public comment. We will let you know if either happens.