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Continuum of Care (CoC) Program Eligibility Requirements

The CoC Program is designed to assist individuals (including unaccompanied youth) and families experiencing homelessness and to provide the services needed to help such individuals move into transitional and permanent housing, with the goal of long-term stability. More broadly, the CoC Program is designed to promote community-wide planning and strategic use of resources to address homelessness; improve coordination and integration with mainstream resources and other programs targeted to people experiencing homelessness; improve data collection and performance measurement; and allow each community to tailor its programs to the particular strengths and challenges in assisting homeless individuals and families within that community.

Eligible Applicants

Under the CoC Program interim rule, eligible applicants consist of nonprofit organizations, State and local governments, instrumentalities of local governments, and public housing agencies. An eligible applicant must be designated by the Continuum of Care to submit an application to HUD for grant funds. The Continuum's designation must state whether the Continuum is designating more than one applicant to apply for funds, and if it is, which applicant is being designated as the Collaborative Applicant. A Continuum of Care that is designating only one applicant for funds must designate that applicant to be the Collaborative Applicant. For-profit entities are not eligible to apply for grants or to be subrecipients of grant funds.

Program Components

The CoC Program interim rule provides that Continuum of Care Program funds may be used for projects under five program components: permanent housing, transitional housing, supportive services only, HMIS, and, in some cases, homelessness prevention. Administrative costs are eligible under all components. Where possible, the components set forth in the Continuum of Care Program are consistent with the components allowable under the Emergency Solutions Grants program. This eases the administrative burden on recipients of both programs and ensures that reporting requirements and data quality benchmarks are consistently established and applied to like projects. One significant distinction between the Emergency Solutions Grants Program and the CoC Program can be found in the eligible activities and administration requirements for assistance provided under the rapid re-housing component in this interim rule.

The five program components that can be funded through the CoC Program are listed below. 

Permanent Housing

Permanent housing (PH) is defined as community-based housing without a designated length of stay in which formerly homeless individuals and families live as independently as possible. Under PH, a program participant must be the tenant on a lease (or sublease) for an initial term of at least one year that is renewable and is terminable only for cause. Further, leases (or subleases) must be renewable for a minimum term of one month. The CoC Program funds two types of persmanent housing: permanent supportive housing (PSH) for persons with disabilities and rapid re-housing. Permanent supportive housing is permanent housing with indefinite leasing or rental assistance paired with supportive services to assist homeless persons with a disability or families with an adult or child member with a disability achieve housing stability. Rapid re-housing (RRH) emphasizes housing search and relocation services and short- and medium-term rental assistance to move homeless persons and families (with or without a disability) as rapidly as possible into permanent housing.

Transitional Housing

Transitional housing (TH) is designed to provide homeless individuals and families with the interim stability and support to sucessfully move to and maintain permanent housing. Transitional housing may be used to cover the costs of up to 24 months of housing with accompanying supportive services. Program participants must have a lease (or sublease) or occupancy agreement in place when residing in transitional housing. The provisions of the CoC Program’s TH program component have not changed significantly from the TH provisions under SHP.

Supportive Services Only

The supportive services only (SSO) program component allows recipients and subrecipients to provide services to homeless individuals and families not residing in housing operated by the recipient. SSO recipients and subrecipients may use the funds to conduct outreach to sheltered and unsheltered homeless persons and families, link clients with housing or other necessary services, and provide ongoing support. SSO projects may be offered in a structure or structures at one central site, or in multiple buildings at scattered sites where services are delivered. Projects may be operated independent of a building (e.g., street outreach) and in a variety of community-based settings, including in homeless programs operated by other agencies.

Homeless Management Information System

Funds under this component may be used only by Homeless Management Information System (HMIS) leads for leasing a structure in which the HMIS operates, for operating the structure in which the HMIS is housed, and/or for covering other costs related to establishing, operating, and customizing a CoC’s HMIS. Other recipients and subrecipients may not apply for funds under the HMIS program component, but may include costs associated with contributing data to the CoC’s HMIS within their project under another program component (PH, TH, SSO, or HP).

Homelessness Prevention

Recipients and subrecipients located in HUD-designated High Performing Communities (HPCs) may use CoC Program funds for homelessness prevention assistance for individuals and families at risk of homelessness. The services under this component may include housing relocation and stabilization services as well as short- and medium-term rental assistance to prevent an individual or family from becoming homeless. Through this component, recipients and subrecipients may help individuals and families at-risk of homelessness to maintain their existing housing or transition to new permanent housing. Homelessness prevention must be administered in accordance with 24 CFR part 576.

Other Components

Safe Havens

The Safe Haven program component is no longer eligible under the CoC Program. No new Safe Haven projects will be funded, but the CoC Program interim rule explicitly states that all projects eligible under the McKinney-Vento Act before passage of the HEARTH Act, including Safe Havens, may be renewed in to continue ongoing leasing, operations, supportive services, rental assistance, HMIS operation, and administrative functions beyond the initial funding period. The annual CoC Program NOFA will provide additional details.

Section 8 Moderate Rehabilitation SRO

The Section 8 Moderate Rehabilitation SRO Program component is no longer eligible under the CoC Program. No new SRO projects will be funded. Current SRO projects will continue to be renewed under the Multifamily Assisted Housing Reform and Affordability Act of 1997. 

Eligible Costs

The CoC Program interim rule sets forth the costs eligible for each program component in § 578.37(a). Not all costs are eligible in each program component, and in some cases, certain costs cannot be combined in a single unit or structure. The eligible costs for contributing data to the HMIS designated by the Continuum of Care are also eligible under all components. The eligible costs are summarized below.

Acquisition

Acquisition of real property is an eligible cost category under the PH, TH, and SSO program components. Grant funds may be used for up to 100 percent of the cost of purchasing property for the purpose of providing permanent housing, transitional housing, and supportive services only activities. 

Rehabilitation

Rehabilitation of structures is an eligible cost category under the PH, TH, and SSO program components. Eligible rehabilitation costs include installing cost-saving energy measures and bringing a structure up to health and safety standards. Rehabilitation on leased properties is ineligible.

New Construction

New construction of structures is eligible under the PH and TH program components. New construction may include building entirely new facilities, constructing an addition to an existing structure that increases the floor area by 100 percent or more, and the cost of land for construction. Projects must demonstrate that construction is more cost-effective than rehabilitation. Unlike the previous regulations, the CoC Program interim rule establishes no maximum grant limits for rehabilitation or new construction. CoC Program funds may be used for up to 100 percent of costs as long as the match requirement is met through other resources. New construction on leased properties is ineligible.

Leasing Costs

Leasing is an eligible cost category under the PH, TH, SSO, and HMIS program components. Funds may be used to lease individual units or all or part of structures. Rents must be reasonable and, in the case of individual units, the rent paid may not exceed HUD-determined Fair Market Rents. Leasing funds may not be used for units or structures owned by the recipient, subrecipient, their parent organization(s), any other related organization(s), or organizations that are members of a partnership where the partnership owns the structure without a HUD-authorized exception. When leasing funds are used to pay rent on units, the lease must be between the recipient or the subrecipient and the landowner, with a sublease or occupancy agreement with the program participant. The recipient may, but is not required to, charge the program participant an occupancy charge, consistent with the parameters specified in the interim rule.

Rental Assistance Costs

Rental assistance is an eligible cost category under the PH and TH program components and may be tenant-based (TBRA), sponsor-based (SBRA), or project-based (PBRA), depending upon the component type.

Rental assistance may be short-term for up to 3 months; medium-term for 3 to 24 months; or long-term for more than 24 months. The length of assistance depends upon the component type under which the cost is funded. Recipients must serve as many program participants as identified in their funding application to HUD, but, if the amount reserved for the term of the grant exceeds the amount needed to pay actual costs, the excess funds may be used to cover property damage, rent increases, or the rental needs of a greater number of program participants.

  • TBRA. Program participants select any appropriately sized unit within the CoC’s geographic area, although recipients or subrecipients may restrict the location under certain circumstances to ensure the availability of the appropriate supportive services. Except for victims of domestic violence, program participants may not retain their rental assistance if they relocate to a unit outside the CoC’s geographic area.
  • SBRA. Program participants must reside in housing owned or leased by a sponsor organization and arranged through a contract between the recipient and the sponsor organization.  
  • PBRA. Program participants must reside in housing provided through a contract with the owner of an existing structure whereby the owner agrees to lease subsidized units to program participants. Program participants may not retain their rental assistance if they relocate to a unit outside the project. 

When rental assistance funds are used to pay rent on units, the lease must be between the program participant and the landowner. Each program participant, on whose behalf rental assistance payments are made, must pay a contribution toward rent consistent with the requirements of the interim rule.

Supportive Services Costs

Supportive services are eligible costs under the PH, TH, and SSO program components. The CoC Program interim rule specifies all eligible services and clarifies that any cost not listed in the rule is ineligible. As in the past, services must be offered to residents of PSH and TH for the full period of their residence. RRH programs must require program participants to meet with a case manager at least monthly.

Services may be provided to formerly homeless individuals for up to six months after their exit from homelessness, including the six months following exit from a transitional housing project. Recipients and subrecipients are required to perform an annual assessment of the service needs of their program participants and to adjust services accordingly. Eligible costs include the cost of providing services, the salary and benefits of staff providing services, and materials and supplies used in providing services.

Operating Costs

Operating costs are eligible under the PH, TH, and HMIS program components. Funds may be used to pay the day-to-day operating costs in a single structure or individual housing units, including maintenance (such as scheduled replacement of major systems), repair, building security (when CoC Program funds pay for more than 50 percent of the facility by unit or area), electricity, gas, water, furniture, equipment, property insurance, and taxes. These costs may not be combined with rental assistance costs within the same unit or structure, and operating costs are not eligible under the SSO program component.

HMIS Costs

Costs related to contributing client data to or maintaining data in the CoC’s HMIS or a comparable database for victim services providers or legal services providers are eligible costs under the PH, TH, SSO, and HMIS program components. Eligible HMIS costs include hardware, equipment and software costs; training and overhead; and staffing costs associated with contributing data to the HMIS designated by the CoC for its geographic area.

Project Administration

Recipients and subrecipients may use up to 10 percent of any grant, excluding the amount for CoC planning and Unified Funding Agency (UFA) costs, established through the CoC Program NOFA for project administrative costs. These costs include expenses related to the overall administration of the grant (24 CFR part 578.59), such as management, coordination, monitoring, and evaluation activities and environmental review.