Virginia’s landscape of funding for homeless services programming has felt like a whirlwind for some time now, especially regarding investments at the federal level – which make up the vast majority of our homelessness response dollars in the Commonwealth. This article will break down where Virginia gets its homelessness funding from, the current risks and uncertainties affecting those funds, and what state lawmakers in the General Assembly can do to prevent a crisis in the near future.
Start Here: Continuums of Care
Across the United States, there are networks of organizations and stakeholders known as Continuums of Care (CoCs) that convene to address homelessness locally. In Virginia, there are sixteen CoCs, covering every corner of the Commonwealth. Want to know more? This recent article by our friends at HousingForward Virginia is an excellent primer on how CoCs function to combat homelessness in our state.
The Continuum of Care framework was first established by the U.S. Department of Housing and Urban Development (HUD) in 1994. Since then, HUD has routinely issued competitive applications to award funding for these collaborative systems on an annual basis. This occurs through a federal Notice of Funding Opportunity (NOFO).
In addition to coordinating entry into our systems of care for individuals and families experiencing homelessness, our CoCs administer a variety of evidence-based programs to address the root causes of both situational and chronic homelessness. In FY24, over $47 million in HUD CoC funding was competitively awarded to 128 projects across Virginia. The vast majority (approximately 91%) of this funding supports permanent supportive housing for people with disabilities who were formerly homeless and rapid rehousing for families with children and youth aging out of foster care. About 3,200 Virginians are currently housed and receiving services through these federally-funded programs.
What is the Current Status of the Continuum of Care Program?
Last year, there was a marked shift in the federal government’s approach to addressing homelessness. Evidence-based policies, to include the Housing First approach, were deprioritized in favor of interventions such as short-term transitional housing.
The annual HUD NOFO, which is typically issued each summer, was also significantly delayed in 2025. When HUD finally released the FY2025 NOFO in mid-November, housing providers and advocates scrambled to respond to significant changes in funding levels and application requirements. If HUD proceeds under this initial proposal, the impacts will be significant. Disruptions to permanent supportive housing and associated services are expected to increase homelessness and shift costs to other public systems. Based on existing research and Virginia specific estimates, downstream costs to health care, emergency services, and the criminal legal system could exceed $279 million annually.
On February 3, 2026, Congress passed the FY26 HUD appropriations bill, which includes provisions to ensure continuity of CoC housing and services funding. The legislation prevents gaps in CoC funding while the FY25 Notice of Funding Opportunity (NOFO) remains under litigation by requiring HUD to renew all CoC grants expiring in the first quarter of 2026 for a full 12-month term. For grants expiring later in the year, automatic renewals will be issued on April 1 and July 1 unless a new NOFO has been released and funds have been awarded. To support program stability during this period, all renewed grants must match prior award amounts and include cost-of-living and fair market rent adjustments. The bill also directs HUD to initiate future NOFOs on time and to prioritize renewing existing projects. However, it is still unclear how HUD will interpret and implement this direction from Congress and how this will impact pending federal litigation that has temporarily prevented HUD from reissuing the FY25 NOFO.
While these actions address immediate funding concerns, concerns remain for projects expiring later in the year and into next year. The current administration has made clear that changes to homelessness policy and funding priorities remain a top federal objective, and that similar reforms will be pursued again in future funding cycles. It’s not a matter of “if”, but “when.” As a result, ongoing shifts in federal policy priorities, program requirements, and funding structures continue to create uncertainty for providers and local systems, particularly as programs are required to adapt to new and evolving HUD expectations.
Virginia’s homelessness response system is very vulnerable to this uncertainty due to its heavy reliance on federal funding. Strengthening state-level coordination, planning, and investment remains essential to managing this volatility and ensuring continuity of services for Virginians experiencing homelessness.
So What Can We Do Now?
Whether you are a citizen advocate or a housing services provider, there are steps that can be taken now to help prevent a crisis in the near future. The next few weeks will be critical for Virginia’s homelessness response systems, as the General Assembly takes up proposed budget amendments such as 102#13h and 102#1s. Without an increase in state-level funding for homelessness, thousands of individuals and families in Virginia risk losing the critical supports they rely on to remain safely and stably housed.
We strongly encourage any Virginia residents to contact their state legislators. One tool that you can use is our Call to Action – this simple, customizable contact form will help you to email the members of House and Senate Appropriations in support of funding to address homelessness. It only takes 30 seconds to reach out!