December 8, 2025

Louisville Faces Potential Cuts to Permanent Housing Funding

Louisville, Kentucky, December 8, 2025

Proposed funding cuts by the U.S. Department of Housing and Urban Development threaten permanent housing solutions in Louisville, jeopardizing assistance for vulnerable populations. A 30% cap on funding for supportive housing projects could result in a substantial loss of federal resources. With ongoing legal actions from the state government, the future of housing support initiatives remains uncertain.

Louisville Faces Potential Cuts to Permanent Housing Funding

Louisville, Kentucky – Proposed funding cuts threaten the availability of permanent housing options for residents in Louisville. These cuts could significantly impact the city’s efforts to provide stable housing for its most vulnerable populations.

Proposed Funding Reductions

The U.S. Department of Housing and Urban Development (HUD) has announced changes to the Continuum of Care program, which directs federal dollars to keep families with children, seniors, veterans, and disabled persons housed. The proposed changes include:

Implementing a 30% cap on funding that states can receive for permanent supportive housing projects.
Requiring states to re-apply for money previously approved by Congress and awarded in 2024.

Without these changes, Kentucky was expected to receive over $21 million to keep people housed and provide homeless services. With the 30% cap, Kentucky would lose 70% of the more than $15 million currently approved that supports permanent supportive housing in 118 of the state’s 120 counties. This reduction would also impact more than $20 million in federal funding going toward rental assistance and supportive assistance for homeless Kentuckians.

Impact on Louisville’s Housing Initiatives

Louisville has been actively working to address housing challenges through various initiatives. In January 2023, Mayor Craig Greenberg announced a comprehensive plan to create and preserve 15,000 affordable housing units. This strategy includes revising the Land Development Code to allow more density and remove regulatory barriers hindering housing development.

Additionally, the Louisville Affordable Housing Trust Fund (LAHTF) was allocated $15 million in 2024 to support affordable housing development, rehabilitation of vacant properties, and integration of low-income housing. However, there is no dedicated funding stream for the LAHTF as of March 2025.

State-Level Legal Actions

In response to the proposed federal funding changes, Kentucky Governor Andy Beshear joined a lawsuit challenging the Trump administration’s alterations to the HUD program. The lawsuit argues that these policy changes would eliminate more than $15 million in federal funding to Kentucky, putting 700 households at risk of returning to homelessness and 1,200 Kentuckians at risk of losing their housing.

Background Context

Louisville has been proactive in addressing housing issues. In October 2025, the city established the Office of Behavioral Health to tackle the root causes of housing instability and homelessness. This office aims to coordinate services and provide support to individuals facing housing challenges.

Despite these efforts, the proposed federal funding cuts pose a significant threat to the progress made in providing permanent housing solutions for Louisville residents. The outcome of the ongoing legal actions and potential policy changes will play a crucial role in determining the future of housing support in the city.

Key Features of Louisville’s Housing Initiatives

Initiative	Description	Funding	Target
My Louisville Home Strategy	A comprehensive plan to create and preserve 15,000 affordable housing units in Louisville.	Not specified	Low-income households
Louisville Affordable Housing Trust Fund (LAHTF)	Supports affordable housing development and rehabilitation of vacant properties.	$15 million allocated in 2024	Low-income residents
Office of Behavioral Health	Established to address root causes of housing instability and homelessness.	Not specified	Individuals facing housing challenges

Frequently Asked Questions (FAQ)

What are the proposed funding cuts affecting Louisville’s housing programs?

The U.S. Department of Housing and Urban Development (HUD) has proposed changes to the Continuum of Care program, including a 30% cap on funding for permanent supportive housing projects and requiring states to re-apply for previously approved funds. These changes could result in a significant reduction of federal funding for housing programs in Kentucky, including Louisville.

How has Louisville been addressing housing challenges?

Louisville has implemented several initiatives, such as the “My Louisville Home” strategy, aiming to create and preserve 15,000 affordable housing units. The city has also allocated $15 million to the Louisville Affordable Housing Trust Fund to support affordable housing development and rehabilitation of vacant properties.

What legal actions have been taken in response to the proposed funding cuts?

Governor Andy Beshear has joined a lawsuit challenging the proposed changes to the HUD program, arguing that they would eliminate over $15 million in federal funding to Kentucky, potentially leading to homelessness for many residents.