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9h ago

HUD Suspends Federal Funding to Los Angeles Homeless Agency

The action launches a HUD Office of Inspector General probe into alleged fraud and signals possible federal withdrawal from local homelessness programs.

An image collage containing 3 images, Image 1 shows Homeless individuals and their tents line a street in Skid Row, Los Angeles, with a backdrop of city skyscrapers, Image 2 shows JD Vance speaks with reporters after arriving on Air Force Two, Image 3 shows Nithya Raman speaking at a press conference with a "Nithya for Mayor" sign beside her
LOS ANGELES, CALIFORNIA - JUNE 28: An encampment of unhoused people is viewed in the Skid Row community on June 28, 2024 in Los Angeles, California. The U.S. Supreme Court ruled today that cities can ban people, including those who are homeless, from camping and sleeping outdoors in public places, overturning lower court rulings. Skid Row is home to thousands of people who are either experiencing homelessness on the streets or living in shelters. (Photo by Mario Tama/Getty Images)
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Overview

  • HUD notified the Los Angeles Homeless Services Authority of an immediate suspension of federal Continuum of Care funding and said the HUD Office of Inspector General will investigate alleged fraud and severe management failures.
  • Federal officials cited specific failures including inability to verify nearly 2,300 housing sites, widespread missing expense disclosures, late payments to providers, and about $944 million in HUD grants to the Los Angeles Continuum of Care since 2021.
  • LAHSA disputed the move, warned the suspension could put thousands who rely on its rehousing programs at risk, said it is implementing reforms with KPMG and has 30 days to request a hearing to contest the suspension.
  • Local leaders have already reduced LAHSA’s role: the Los Angeles County Board of Supervisors voted in 2025 to redirect roughly $350 million a year away from LAHSA starting July 1, 2026 and created a new county homelessness department.
  • The federal action is tied to the White House Task Force to Eliminate Fraud and could accelerate federal and local shifts in how homelessness dollars are awarded, with immediate consequences for providers, contracts, and clients served by LAHSA.