Twelve nonprofits providing critical homelessness services in Los Angeles face uncertainty as federal funding remains in limbo amid a dispute between the Trump administration and the Los Angeles Homeless Services Authority (LAHSA). The issue centers on grants that together total roughly $10 million, part of a much larger $240 million pool at risk pending the outcome of a U.S. Department of Housing and Urban Development (HUD) investigation.

The regional agency, LAHSA, which oversees the distribution of federal homelessness dollars, was suspended by HUD on June 11 from managing and coordinating these funds. The suspension follows allegations of mismanagement and conflicts of interest, with HUD citing potential threats to the public. LAHSA responded by filing a lawsuit to block the suspension, with a court hearing scheduled for August 6. Meanwhile, contracts for grants approved but not yet finalized before June 11 remain unsigned, and no new contracts are being executed.

Nonprofits serving vulnerable populations, including survivors of domestic violence, are caught in the middle. Jewish Family Service LA’s domestic violence shelter, housing 12 families in a confidential location, has been operating on a $300,000 HUD grant since April without a signed contract. The organization’s president and CEO, Eli Veitzer, expressed frustration with the lack of financial certainty, noting that they have been fronting costs for four months without assurance of reimbursement.

Similarly, the Downtown Women’s Center, which provides housing for women facing homelessness and violence, is awaiting federal contracts for grants totaling $4.2 million. CEO Amy Turk described the situation as "unnerving," highlighting the challenge of sustaining services without confirmed funding. The People Concern, which offers housing and support services, is also impacted, with CEO John Maceri awaiting signed agreements for $727,000 in funding starting July 1. Maceri warned that without contract execution, the organization may be forced to reduce services, particularly interim housing that provides temporary shelter and basic needs to those experiencing homelessness.

LAHSA officials, speaking anonymously due to the ongoing lawsuit, indicated that the suspension halts the execution of all unsigned grant agreements, despite agencies continuing to spend funds on the assumption that payments will be made. In normal circumstances, nonprofits compete annually for approximately $200 million in federal homelessness grants through LAHSA, with contracts enabling reimbursement for services such as rental assistance and emergency shelter.

HUD did not respond to requests for comment. However, a HUD program officer, in written court testimony, stated that funds already committed through fully executed contracts would not be affected by the suspension. It remains unclear what will happen with grants approved but lacking finalized agreements.

This funding uncertainty comes as LAHSA recently reported a 3.4% increase in homelessness in Los Angeles County over the past year, reversing a previous downward trend. Notably, homelessness related to domestic violence surged by 43%. The tension between federal and local agencies has thus intensified the challenges for nonprofits on the front lines of addressing homelessness, raising concerns about the continuity and quality of vital services for some of the city’s most vulnerable residents.