HUD litigation forces Spokane CoC to resubmit prior applications; staff warn of possible funding losses
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Summary
HUD rescinded a 2025 Continuum of Care NOFO after lawsuits. Spokane’s CoC board voted to resubmit last year’s applications; staff warned earlier draft changes could have meant large cuts to local permanent supportive housing — an estimated $4 million loss — and signaled ongoing legal uncertainty through February.
City housing staff provided a detailed update on the HUD Continuum of Care (CoC) NOFO process, the litigation that followed publication of the 2025 NOFO, and what the rulings mean for local funding.
The presenter explained HUD rescinded the November 2025 NOFO following lawsuits and a Rhode Island federal judge’s orders. HUD published a plan on January 8 that complied with the judge’s orders and gave jurisdictions two options for submissions: resubmit prior applications unchanged for renewal, or propose reallocations where providers do not want to continue. The city’s CoC board voted on January 21 to resubmit the same application because there were no eligible projects to reallocate locally.
Staff warned the original 2025 NOFO contained policy changes that could have led to significant funding reductions in the region. The presenter summarized central policy changes that drew litigation: new participation-in-services requirements, SAVE verification changes, caps on permanent supportive housing, and substantive tiering adjustments. Under one reading of the original NOFO the presenter said Spokane faced a roughly $4,000,000 reduction for permanent supportive housing and potentially much larger proportional cuts under some scoring scenarios.
"Permanent supportive housing was capped at 30% of your funds in that NOFO, which should be about a $4,000,000 loss locally for us," the presenter said.
Staff also flagged timing risks: a judge’s interim rulings and potential written rulings in early February could change HUD’s process again; HUD must publish a new NOFO in June 2026 with awards named in December 2026 under the court schedule. Staff said they are modeling contingencies and coordinating with the state for potential flexibility of state dollars should federal funding be reduced.
Council members asked whether services could continue if HUD awards are reduced; staff said it was unlikely without local or state backfill, and that conversations with Commerce and weekly coordination among CoC leads are underway.
Staff said the city will submit materials to HUD by February 9 but noted the situation remains fluid given ongoing litigation and possible appeals.