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Sonoma County supervisors hear pleas for short-term bridge funding after abrupt HUD funding disruption
Summary
County staff and nonprofit providers told supervisors that 12 HUD-funded homeless projects (about $4.2M/year) serving roughly 209 units and ~250 people are in limbo after a late NOFO change; providers urged short-term bridge loans while the county and coalition develop a January proposal.
County leaders on Friday heard urgent testimony from nonprofits and a county presentation about a sudden federal funding disruption that threatens 12 homelessness projects serving roughly 250 people.
Nolan Sullivan, director of the Department of Health Services, told the Board of Supervisors the Continuum of Care (COC) includes 12 grants totaling about $4,200,000 annually that support about 209 supportive-housing units. He said the U.S. Department of Housing and Urban Development issued an abrupt change to its Notice of Funding Opportunity on Nov. 12 and then withdrew the NOFO on Dec. 8 after a court injunction, leaving projects and contractors in “limbo.”
“This changes the time clock from 24 months to 12 months, and some projects are scheduled to start in January 2026,” Sullivan said, warning that the timing creates acute cash-flow risk for nonprofit partners.
Nonprofits urged the county to provide temporary gap financing. Tom Beery, executive director of Community Support Network, described a proposal to preserve 150 units of permanent supportive housing and said a bridge loan could range from $750,000 to $1,500,000 and might be structured as a repayable loan if HUD awards are later made.
“The bridge funding may be able to be paid back to the county, if the funds are only needed to bridge the programs through a funding delay,” Beery said.
Chris, identified in public comments as CEO of COTS, said his agency is already notifying tenants and faces roughly $330,000 in annual losses for at-risk projects. “COTS does not have the time to wait,” he said, urging immediate help to avoid displacement of seniors and people with disabilities.
Directing next steps, several supervisors said they wanted more detail but signaled support for short-term contingency planning. Director Sullivan recommended the County Administrative Office maintain a contingency the board could access — on the order of $200,000 to $250,000 — to address verified immediate needs while staff and the nonprofit coalition refine a proposal.
Chair Hopkins and other supervisors asked staff to work with providers and return to the board at its first meeting in January with a recommended plan. “We look forward to seeing you back on January 6 with a proposal that we can vote on that will hopefully prevent any homelessness crises and people being displaced,” Hopkins said.
Board discussion also flagged broader policy questions: supervisors debated the county’s existing policy against backfilling lost state or federal funds, agreed that the county cannot sustain permanent backfills for large program losses, and requested a more holistic budget framework to respond to recurring federal and state program changes.
Sullivan and providers emphasized two separate risks: immediate cash-flow gaps that can be handled by bridge financing, and longer-term changes to program design that could alter how grants are awarded — a risk that cannot be fully resolved by local loans.
The board took no immediate appropriation at the meeting; instead, it directed staff to return Jan. 6 with a proposal informed by the coalition’s work and with criteria for any short-term CAO-accessible contingency fund.
