Federal dollars that keep more than a thousand Mainers in permanent housing are in limbo after the U.S. Department of Housing and Urban Development withdrew a policy change that would’ve drastically reduced funding.
HUD released a funding application last month that would have effectively cut off funding for hundreds of vouchers used to house vulnerable Mainers, but the agency rescinded that application Monday shortly before a court hearing on the policy change.
The withdrawal does not necessarily mean that HUD will revert back to its previous policy. The local governments and nonprofits that receive the funding are currently in limbo as they await new guidance from the federal agency.
The decision comes after Maine joined one of two lawsuits challenging the move at the end of November. It’s unclear what the pause will mean for the residents who rely on those vouchers, including many in Bangor, as service providers wait for HUD to release a revised policy.
Housing advocates in Maine said they were surprised by the move but hoped it would provide an opportunity for the federal government to adjust its approach to the program, which is one piece in the Trump administration’s broader overhaul of homelessness services.
“We were shocked at the withdrawal yesterday,” Bangor’s public health director, Jennifer Gunderman, said Tuesday.
Gunderman said that while the reversal “creates a little bit of chaos and instability,” there’s a chance HUD’s revisions could result in a policy that better aligns with housing needs.
HUD withdrew the funding application “in order to assess the issues raised by plaintiffs in their suits and to fashion a revised [application],” according to a Monday court filing.
The judge is expected to issue a final ruling on the suit Dec. 19.
The policy announced last month would have diverted a significant amount of funding for statewide Continuums of Care, the planning bodies that coordinate homelessness funding, away from permanent supportive housing and toward more restrictive programs with work requirements or mandatory mental health and substance use treatment.
Dean Klein, the executive director for Maine’s Continuum of Care, said HUD’s decision to withdraw that policy was an important step, although he added that the uncertainty around what the new application will look like makes it difficult to plan.
“If those priorities change, [whether that’s] another policy shift or going back to the way it was, that will require us to scramble to try to meet those new deadlines,” Klein said Tuesday.
Gunderman said her team is waiting to see HUD’s revised policy, which could change the way they approach Bangor’s funding application.
“We were planning on submitting a renewal for our housing vouchers, knowing it was going to be dramatically cut,” Gunderman said, adding that her department was also working on a new proposal to expand street outreach, which would provide support services to homeless residents but not housing. She said work on that proposal will mostly be put on pause until HUD issues further guidance.
Advocates in Maine will continue to push elected officials to renew the current funding.
The Maine Affordable Housing Coalition hopes to see “at a minimum a delay and a continuation of flat funding through the end of 2026,” according to Laura Mitchell, the group’s executive director.
Maine’s Continuum of Care got about $22 million from the federal government last year, and more than $16 million of that money was used to fund permanent supportive housing. Those funds support housing for about 1,800 people statewide, and the cuts would have put 1,200 of them at risk of becoming homeless, Gov. Janet Mills said last month, calling the policy change “callous and unnecessary.”
Some of that funding is allocated to Bangor’s rental assistance program, which houses 170 people in 139 units, Gunderman said.
These residents live “throughout the city and even in a few surrounding towns,” she added.
People across the state also get housing vouchers through the Maine Department of Health and Human Services permanent supportive housing program.
Both voucher programs are limited to people who have been homeless and have a disability.
If people and families using those vouchers were to lose their housing, “some of our most vulnerable individuals will have nowhere to go and no options,” Klein said — especially since many Maine homeless shelters are already at capacity.
Gunderman added that the rental assistance program has helped house people affected by the Penobscot County HIV outbreak, and that housing vouchers are an essential tool for the city when trying to relocate residents of homeless encampments, a process currently underway at an encampment near the Penobscot River.
Some of the funding from Bangor’s current grant is set to expire April 1, Gunderman said. If an already-prolonged process takes even longer as HUD reconsiders its policies, that could result in a gap between when money runs out and when new grants are awarded.
“If we get funded — if that funding comes after April 1st, there will be a gap,” she said.
