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County warns HUD rule changes could put up to $42 million of CoC funding at risk; HUD withdraws NOFO pending revisions
Summary
Health staff told Alameda County supervisors that HUD's FY25 Continuum of Care NOFO would sharply reduce Tier 1 protections (to ~30% or $18M of $60M), placing roughly $42M of current grants at competitive risk and forcing local contingency planning; staff later reported HUD has withdrawn the NOFO for revision.
Alameda County housing and homelessness officials warned the Health Committee on Dec. 8 that the U.S. Department of Housing and Urban Development's FY25 Continuum of Care (CoC) Notice of Funding Opportunity (NOFO) would dramatically change federal priorities and expose a large portion of local federal grants to competitive review.
"This year's NOFO reflects unprecedented impacts," Jeanette Rodriguez, Deputy Director for Housing, told supervisors, explaining the national NOFO was released in mid-November with an accelerated January 14 submittal deadline that compresses the local planning timeline. Rodriguez said the county's CoC portfolio represents about $60 million annually and historically about $51 million of that supported permanent supportive housing (PSH). Under the FY25 NOFO, Tier 1 protections fall to roughly 30% of the portfolio, capping protected funds at about $18 million and leaving approximately $42 million subject to competitive review.
"This also reflects a shift from Housing First principles," Rodriguez said, describing that HUD's priorities would include program models that require participation in services, treatment linkages or employment initiatives rather than the previous emphasis on long-term permanent housing. She added that HUD's new rules could require reallocating $33 million in permanent housing funding or risk its loss.
County staff described immediate steps: creation of a NOFO response team to prioritize preservation of at-risk grants, outreach to grantees most likely to face imminent lapses, and assessment of local funding strategies (including possible Measure W bridge funding) to backfill threatened services so households do not lose housing. "We're strategically looking and evaluating new projects that would meet HUD's changing requirements and fill local system gaps to offset projected losses," a staff member said.
Supervisors probed options including reprioritizing Measure W or other local funds, the implications of Prop 1 transitions, and what portion of services and households could be affected. Staff estimated roughly 2,100 households are served by the federal funding streams in question and warned that delayed grant renewals (now projected beyond May 2026) could create timing gaps that would require bridge funding for providers.
Late in the committee discussion staff reported a development that changes immediate planning: HUD announced it had withdrawn the FY25 NOFO to prepare revisions. "HUD withdrew the NOFO today and are working on revisions to it," Jeanette said. Staff said they are monitoring changes day-to-day and would update the board as new information arrives; withdrawal may delay award timelines and affect the scale and timing of any needed bridge funding.
Committee members directed staff to continue coordination with regional partners and to return with more detailed contingency proposals, including potential use of local capital or operating funds for short-term backfill and a plan to preserve as much permanent housing as possible.
The committee did not take formal action on the NOFO briefing; staff said they will provide updates as HUD revises the NOFO and as the NOFO response team completes its recommendations.
