Pay for Success Permanent Supportive Housing Demonstration | FR 5900 N 26

Opportunity Information: Apply for FR 5900 N 26

The Pay for Success Permanent Supportive Housing (PSH) Demonstration was a joint effort by the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Justice (DOJ) designed to help communities reduce homelessness and avoidable incarceration at the same time. The core idea was to expand Permanent Supportive Housing, an evidence-based intervention that combines affordable, stable housing with voluntary supportive services, and to do it using a Pay for Success (PFS) financing approach. Under a PFS model, partners use outcomes-based agreements so that payments are tied to achieving measurable results, such as reducing returns to homelessness and lowering recidivism among people reentering the community after incarceration. In practical terms, the demonstration aimed to give communities a new way to pay for PSH projects up front by attracting or coordinating public and private resources, then rewarding success based on verified outcomes.

A major emphasis of the program was on systems-level coordination and performance. HUD and DOJ framed the demonstration as both an expansion strategy (getting more PSH units and services into operation) and a learning opportunity (testing whether an outcomes-based financing structure can improve cost efficiency and effectiveness in homelessness assistance). The target population highlighted in the description includes people in the reentry population who are at risk of cycling between homelessness and incarceration. By stabilizing housing with a Housing First orientation (meaning housing is not contingent on treatment compliance or sobriety), the program sought to interrupt that cycle and reduce downstream public costs tied to jails, shelters, emergency medical care, and repeated crisis responses.

Applicants were not applying as direct service providers alone; they were expected to serve as an intermediary for the demonstration. That intermediary role generally means coordinating the deal structure and partnerships required for PFS, aligning government and service systems, supporting implementation of the PSH intervention across partners, and ensuring the project has the operational backbone to manage performance, data, and evaluation requirements. The notice made clear that HUD welcomed eligible faith-based and community organizations as long as they met the eligibility requirements, but it also explicitly stated that individuals could not apply through this competitive process. Foreign entities and sole proprietorships were also not eligible.

Eligible applicant types included public and state-controlled institutions of higher education, private institutions of higher education, and nonprofits both with and without 501(c)(3) status (as long as they otherwise met the program requirements). The funding instrument was a cooperative agreement under HUD (assistance listing/CFDA 14.273), indicating that recipients could expect substantial federal involvement during implementation compared with a more hands-off grant. The opportunity was categorized as discretionary housing funding. At the time of the announcement, HUD anticipated making about six awards, with an award ceiling of $1.3 million per award. The original closing date listed was February 12, 2016, and the opportunity was created on October 15, 2015.

Selection competitiveness was tied heavily to demonstrated capability in both Pay for Success and Permanent Supportive Housing. Strong applicants were expected to show a track record of high performance and reliable past results, along with experience completing a PFS feasibility analysis and/or structuring a PFS contract that successfully closed (or comparable experience in social finance or social innovation). Because PFS projects depend on multi-party alignment, applicants also needed experience brokering partnerships between public and private entities. On the PSH side, applicants were expected to bring advanced knowledge of the PSH model and the Housing First approach, familiarity with the research evidence supporting PSH, and the practical ability to implement PSH with partners. Finally, because payments and credibility in PFS depend on measured outcomes, the program looked for expertise in research methods and in translating those methods into real-world evaluation and performance measurement (often meaning strong data capacity, outcome definition, and the ability to support rigorous assessment of results).

Overall, the demonstration can be summarized as a federal effort to scale PSH for high-need populations, especially people impacted by reentry, by pairing an evidence-based housing intervention with an outcomes-driven financing mechanism. The federal government’s goal was not only to house people and provide supports, but also to prove and pay for measurable results that reduce repeat homelessness and recidivism, while testing whether this approach can deliver better value and expand communities’ access to capital and funding streams for supportive housing.

• The Department of Housing and Urban Development in the housing sector is offering a public funding opportunity titled "Pay for Success Permanent Supportive Housing Demonstration" and is now available to receive applicants.
• Interested and eligible applicants and submit their applications by referencing the CFDA number(s): 14.273.
• This funding opportunity was created on 2015-10-15.
• Applicants must submit their applications by 2016-02-12. (Agency may still review applications by suitable applicants for the remaining/unused allocated funding in 2026.)
• Each selected applicant is eligible to receive up to $1,300,000.00 in funding.
• The number of recipients for this funding is limited to 6 candidate(s).
• Eligible applicants include: Public and State controlled institutions of higher education, Nonprofits having a 501 (c) (3) status with the IRS, other than institutions of higher education, Nonprofits that do not have a 501 (c) (3) status with the IRS, other than institutions of higher education, Private institutions of higher education.

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