Maine’s top housing and public health officials issued an extraordinary warning Monday about how a new federal mcap would affect the state. A sweeping federal policy shift from the U.S. Department of Housing and Urban Development (HUD) could dismantle Maine’s permanent housing programs and force more than 1,200 elderly, disabled, and formerly homeless residents back onto the streets, they said.
At the center of the controversy is a newly released HUD Continuum of Care (CoC) directive that dramatically rewrites decades of federal homelessness policy. HUD is now capping permanent housing, including permanent supportive housing and rapid rehousing at just 30 percent of a community’s funding application, slashing the backbone of Maine’s housing response.
Gov. Janet Mills (D) said her administration is already working with the Attorney General’s Office and other states on potential legal action. HUD’s move, she said, is “drastic and callous and unnecessary,” warning it will destabilize thousands of vulnerable Mainers.
The new federal policy has triggered alarm across the country. Housing coalitions estimate the shift could impact 170,000 households nationally, and courts in two states have already issued rulings halting similar HUD actions. But in Maine, where communities rely heavily on CoC funding, the fallout could be immediate and severe.
Permanent Housing Slashed: Many Will Die on the Streets’
Dean Klein, executive director of the Maine Continuum of Care, said the state previously secured more than $22 million annually for permanent housing programs serving chronically homeless individuals, veterans, disabled Mainers, domestic violence survivors, and youth.
Under HUD’s new cap, he said that support collapses.
Klein said more than 1,200 Mainers, most of them elderly or disabled, currently rely on HUD-supported housing. Without the federal subsidy, they would have to cover full rent immediately.
“Many of those individuals might die on the streets because of these changes,” Klein said.
Advocates warn that the damage won’t be limited to Portland or Bangor. Communities from Rumford to Skowhegan, Ellsworth to Auburn, would all see funding gutted.
Bangor: HIV Outbreak Could Worsen Without Housing
Bangor Public Health Director Jennifer Gunderman said nearly 300 residents in the region rely on HUD-backed rental assistance the largest concentration in Maine. Bangor is currently battling one of the largest HIV outbreaks in recent state history, fueled in part by homelessness and unstable shelter conditions.
Gunderman warned that homeless individuals cannot reliably store medication, attend medical appointments, or maintain treatment.
“Housing is a vital public health tool, not just a social service,” she said, arguing that HUD’s cuts will worsen the outbreak and drive new infections.
Preble Street: 812 Households at Risk, Shelters Already Full
Aaron Kelly of Preble Street said 812 Maine households, more than 1,200 people, depend on permanent housing subsidies that cover roughly 70 percent of their rent.
HUD’s directive, he said, would eliminate that support entirely.
“These households would be at risk of losing their homes and returning to the street,” Kelly said. He added that shelters statewide are “full every single night” and cannot absorb the surge.
Kelly noted that HUD is simultaneously pushing high-barrier temporary programs and treatment-mandated models approaches service providers say are ineffective, costly, and destabilizing.
Lewiston Youth Programs: ‘Pulling the Chair Out from Under Them’
In Lewiston, the impact on youth programs would be immediate. Chris Bicknell of New Beginnings said new HUD restrictions will push 60 Maine children out of stable housing this year alone.
“This effectively pulls the chair out from under any progress that they’ve made,” Bicknell said.
His organization serves children and teens from ages 10 to 24. Many have spent years working toward stability.
A National Backlash and Legal Uncertainty
HUD’s overhaul has already generated legal challenges. A federal judge in Rhode Island halted part of HUD’s new scoring system earlier this year. Another case blocked related policy changes in September.
Housing groups, national advocates, and members of Congress argue HUD is attempting to rewrite the McKinney-Vento Homeless Assistance Act without congressional approval.
HUD’s notice of funding opportunities was released unusually late in the grant cycle, raising fears of funding gaps that could disrupt existing programs before new awards are issued.
Even if HUD backtracks, uncertainty alone may destabilize providers.
Mills: Communities Statewide Will Feel the Blow
Gov. Mills emphasized that the policy threatens communities across Maine, not just the state’s largest cities.
Bangor, Portland, Westbrook, Rumford, Lewiston, Auburn, Brewer, Ellsworth, Skowhegan, and counties including Androscoggin and Penobscot are all among the top impacted areas.
“It affects the whole state of Maine,” Mills said. She added that the state cannot fill the financial void left by HUD. “States aren’t able to backfill all the federal cuts.”
Maine’s CoC application, now heavily rewritten to fit HUD’s new criteria, is due January 14, 2026.
Providers say that unless HUD reverses course, Maine’s homelessness crisis is poised to worsen dramatically and immediately.
