ANNAPOLIS–Maryland’s homeless service providers are bracing for a shakier future after the U.S. Department of Housing and Urban Development began delivering recent grant funding weeks behind schedule.
The state’s nonprofit shelter and housing providers say they have weathered the HUD delays without making service cuts, but state officials warn that may not last.
“Any further delay in receiving grant agreements from HUD could create significant challenges for programs to continue providing services in the near future,” said Jake Day, secretary of Maryland’s Department of Housing and Community Development.
The loss of reliable federal funding, Day said, could erode the state’s inventory of emergency and permanent supportive housing, returning residents to homelessness and risking layoffs for support staff.
Nonprofit housing providers say communications with HUD are now improving, and the agency has now begun issuing grant contracts to those with projects scheduled to receive funding in the first quarter of the fiscal year. But some of those providers are still preparing for an uncertain future.
“What does the grant cycle look like for [fiscal year] 2026?” said Nico Sanders, chair of the Baltimore City Continuum of Care, a planning body that distributes funding to the city’s homeless services providers. “That, I think, is the major concern.”
The delays sparked frustration from some federal lawmakers, including Hawaii Sen. Mazie Hirono and California Sen. Adam Schiff. In letters to newly appointed HUD Secretary Scott Turner last month, the two Democrats urged the agency to follow through on its grant commitments after HUD missed a statutory deadline to deliver the funds.
HUD did not respond to a request for comment from Capital News Service.
Each year, HUD awards billions of dollars in grants for homeless services through such regional continuums of care, which often use those grants to maintain existing emergency housing and rental assistance programs.
Federal law gives HUD a maximum of 45 days to obligate grant funds to continuums of care after announcing awards. This year, the Trump administration’s early efforts to freeze the distribution of federal grants ensnared HUD grants for homeless services awarded during the final days of the Biden administration, prolonging the delays and leaving nonprofits reliant on federal grants to stretch reserves, local assistance and other backup funding sources for longer than anticipated.
“It’s important to know what’s happening with one of our inputs so we can plan properly,” said Rose Burton, the deputy director of Howard County’s Department of Housing and Community Development. “We need to be able to budget, and we need to be able to figure out what resources we can bring to bear so that individuals don’t lose their housing.”
Predictable federal funding is especially critical for the state’s rental assistance programs, which often relies on partnerships with landlords willing to open units to people exiting homelessness or at risk of losing stable housing.
If HUD routinely delays the delivery of grants used to provide rental assistance, that supply of subsidized housing “could be at the mercy of a property owner who decides that this is too much,” said Sanders.
A now-rescinded HUD grant agreement notice sent to homeless services providers last month only added to those uncertainties. In that notice, the agency outlined new requirements for access to federal funding, including barring shelters from serving transgender people and requiring service providers to certify that they do not support “sanctuary” policies protecting undocumented immigrants.
“It was a take it or leave it,” said Barbara DiPietro, senior director of policy for the National Health Care for the Homeless Council. “You either agree and get the money, or you don’t agree and don’t get the money.”
Though HUD quickly retracted the letter, Burton says homeless service providers are still unsure of their federal partners’ expectations in future grant cycles. “It’s still unclear what the rules are going to be,” she said.
For the time being, the Maryland department of housing says it is working with the state’s homeless services providers to “generate solutions to any challenges caused by a lack of federal grant agreements and reimbursement for projects” impacted by HUD funding delays.
The open questions about the future of federal support for Maryland’s homeless services providers come amid other shifts in the state’s homelessness policy landscape.
In Hagerstown and Worcester County, elected officials are considering whether to impose criminal penalties for camping in public.
Those discussions follow the U.S. Supreme Court’s decision last year in City of Grants Pass, Oregon v. Johnson, wherein the court’s conservative majority ruled that enforcing bans on camping in public did not constitute ‘cruel and unusual punishment,’ even in the absence of alternative shelter options.
Officials in both Hagerstown and Worcester County argue that criminal penalties for camping in public could help compel homeless residents to engage with social services, possibly under the supervision of the courts – though Worcester County State’s Attorney Kris Heiser told county commissioners that prosecutors would only make “targeted and discretionary” use of those penalties after exhausting other options.
According to Hagerstown Mayor Bill McIntire, the proposal under consideration in his city would likely impact roughly ten people, and he does not expect local courts to impose the maximum jail sentence or $500 fine for those who continue to camp on city property.
But social services providers, including Worcester County Social Services Director Roberta Baldwin, noted that adding a criminal charge to a person’s record is unlikely to set them on the path to stability, not least because a criminal record limits access to subsidized housing – and, therefore, a path out of homelessness.
DiPietro also underscored that county jails are often poorly equipped to care for people with serious behavioral and physical health problems, and that transitions from jail-based treatment to community-based care providers often fail.
An effort by Maryland lawmakers to bar local governments from enforcing ordinances like those proposed in Hagerstown and Worcester County fell short this year.
That bill, sponsored by Montgomery County Democrat Del. Bernice Mireku-North, initially included other legal protections for homeless Marylanders, including by providing a “defense of necessity” for people charged with trespassing while camping in public. A substantially pared-down version of the bill faltered in committee.