Transitional Housing

What Is Transitional Housing?

Transitional housing is temporary housing for people experiencing homelessness. Residents stay for a limited time while they get support to move into a permanent home. On the housing continuum, it sits between emergency shelter and permanent housing.

HUD’s Continuum of Care regulations define it as housing whose purpose is to help homeless individuals and families move into permanent housing within 24 months, or a longer period if HUD decides one is necessary. Depending on the program, residents may live in a private apartment or a room in a shared building.

How Transitional Housing Works

• Time limit. Each resident signs a lease or occupancy agreement for at least one month. Under HUD’s definition, the agreement ends within 24 months and cannot be extended. A separate rule lets a household stay longer if permanent housing has not been found or it needs more time to prepare to live independently. HUD may end funding for a project where more than half of residents stay past 24 months.
• Services. Programs typically offer case management and may add job training, child care, mental health care, or substance use treatment. HUD’s rules allow providers to make participation in services that are not disability-related a condition of staying.
• Funding. The Continuum of Care program can pay to acquire, rehabilitate, build, or lease transitional housing, and for rental assistance, operating costs, and services. Programs may also draw on state, local, or private funding.
• Target groups. Programs are often designed for a specific population, such as domestic violence survivors, young adults, or people in recovery.

A hybrid called joint transitional housing–rapid re-housing combines a short transitional stay with rental help in a private apartment.

Transitional Housing vs. Rapid Re-Housing

Criticisms and Limitations

For most of the period after the 2009 HEARTH Act, HUD’s funding priorities favored Housing First: offering people permanent housing without preconditions such as treatment or sobriety. Critics of transitional housing argued that it makes people move twice and delays permanent housing. Supporters counter that a structured, service-rich setting helps some groups, such as people in early recovery or young people who have never lived on their own.

The Congressional Research Service (CRS) reports that in FY 2024, permanent supportive housing, rapid re-housing, and joint transitional–rapid re-housing projects together received about 88% of Continuum of Care funding. Stand-alone transitional housing received about 1%, and HUD had not funded new transitional housing projects since FY 2012.

HUD’s FY 2025 funding notices, issued in November and December 2025, would have changed that. According to CRS, they would have capped renewals of those three project types at 30% of each community’s annual renewal amount and allowed new transitional housing projects. After lawsuits, a federal district court in Rhode Island issued a preliminary injunction in December 2025. On June 29, 2026, it concluded that HUD violated the Administrative Procedure Act when it issued both notices. Congress, in the FY 2026 appropriations law enacted in February 2026, separately directed HUD to renew expiring grants for 12 months. Because the rules may change again, check HUD’s current Continuum of Care funding notice.