HUD announces new housing assistance for youth leaving foster care

HUD recently announced a new initiative to help foster youth secure affordable housing. Foster youth face many challenges once they age out of the system, and one of the biggest is finding somewhere to live when they leave foster care. HUD’s new Fostering Youth to Independence (FYI) Initiative will provide rental assistance and support services to help former foster youth avoid homelessness and move to economic independence.

In announcing the program, HUD Secretary Ben Carson said, “No young person who grows up in foster care should experience homelessness once they set out on their own. The foundation of a stable life is stable housing and this initiative will allow local housing, working child welfare agencies and homeless planners, to focus this housing assistance to those young people who need it most."

Foster youth are a very vulnerable population. With no family to lean on, they must fend for themselves at a young age. Even those fortunate enough to go to college face the dilemma of where to stay during college breaks. Between 20,000 and 25,000 youth leave the foster care system each year. Almost one-third (28%) experience homelessness by the time they are 21 years old.

HUD’s new FYI Initiative serves foster youth between 18 and 21 years old. They receive Section 8 Housing Choice Vouchers (HCV) for up to 36 months. They pay 30% of their income for rent, with the local housing authority using HUD funds to pay landlords the rest up to the area’s Fair Market Rent (FMR). When the voucher expires, it recycles back to the program to serve more youth leaving foster care.

FYI participants also receive supportive services through the Public Housing Agency’s Family Self-Sufficiency (FSS) program. FSS provides education and services to improve economic self-sufficiency. These services can include child care, transportation, education, job training, financial literacy and homeownership counseling, and other resources to promote increased earnings. These services are usually provided by other service organizations in the community. Participation in the FSS program extends the FYI time limit by two years.

In addition, FSS participants receive interest bearing escrow accounts promoting savings. As households increase their income, the amount they would otherwise pay in additional rent is credited to the account. When they graduate from the program, they can use these savings as they see fit. Studies have found that the escrow balances are often more than $5,000. This can be a nice nest egg to help these young adults get a good start on life. 

HUD moved unusually quickly to address the critical housing needs of youth leaving foster care. The idea was pitched to HUD Secretary Ben Carson in a March 4th meeting by members of the Fostering Stable Housing Opportunities (FSHO) Coalition. HUD issued the public notice with details on eligibility and policy procedures on July 26. FSHO pointed out that HUD had carryover rental assistance funds available in the Tenant Protection Fund (TPF). It also had authority to serve this population through the Family Unification Program (FUP), which is paid out of the TPF. $20 million has been set aside for the FYI Initiative.

The FUP serves two populations. It provides Section 8 HCV assistance to families where lack of stable housing is a factor in removing their children or returning them from out-of-home care. It also serves young adults 18-24 years old aging out of foster care. HUD awards FUP funds to PHAs on a competitive basis. This means that not all areas of the country have had this resource to help foster youth. 

Only PHAs that do not have FUP vouchers are eligible for the FYI Initiative, and the funds are made available on an on-demand basis. When a PHA is approached by a child welfare agency about local foster youth needing housing assistance, the PHA can request FYI funds directly from HUD.

Legislation has been introduced to make the FYI Initiative permanent. The Fostering Stable Housing Opportunities Act of 2019 was introduced in the House by Representatives Mike Turner (R-OH) and Karen Bass (D-CA). The bill has gotten the support of Representative Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee. This committee must approve the bill before it can be considered by the full House. 

The bill has also been sponsored in the Senate by several members of the Senate Caucus on Foster Youth. The bill was originally introduced in the last Congress, but faced opposition because of a work requirement. That provision has been removed, so the bill has good prospects of bipartisan support if it reaches the floors of both the House and Senate.