Federal Funding Freeze: What Happened and What’s Ahead

This is an update on the ongoing issue of the funding freeze. Previous updates – Federal Funding is Paused (Tuesday morning), Funding Freeze Temporarily Blocked by Judge (Wednesday morning), Funding Freeze Memo Rescinded (Wednesday afternoon).

We are deeply troubled by recent developments that threaten the resources serving as a lifeline for many communities, including youth experiencing homelessness.

The funding freeze we witnessed was not merely a case of bureaucratic confusion—it had real and disruptive consequences for essential programs, creating uncertainty for both service providers and the people who rely on these supports.

Actions that target critical, life-saving services through executive orders and policy maneuvers undermine the well-being of those most in need. These programs are vital, and we remain committed to standing up for their preservation.

Thank you to all who stood with us to advocate to Congress against these actions. We are grateful you took the time to call and email your U.S. Representatives. Also, thank you to those who have been sharing what they have been experiencing during this extremely difficult time. We will continue to stand with you and ask you to stay engaged with us.

To help navigate this evolving situation, we have created a timeline of recent events and the current status of key programs, including the Runaway and Homeless Youth Act (RHYA) program.

A memo was released directing federal agencies to identify and review all federal financial assistance programs to ensure they were in accordance with the new President’s policy priorities. The memo was not very clear, but did reference specific executive orders previously issued, including those targeting financial assistance for “foreign aid, nongovernmental organizations, DEI initiatives, gender-affirming services, and the Green New Deal.”

The memo imposed a temporary funding pause, effective Tuesday, January 28 at 5:00 PM. By February 10, the Office of Management and Budget (OMB) was to determine which federal funding fell under the scope of these executive orders.

Grantees across agency programs began experiencing issues logging onto the payment management system to access funds from their grants. Programs that were supposed to be excluded from the freeze, like Head Start, were also unable to log in to their grant portals. This created additional confusion over what the memo was supposed to include versus what was actually being blocked.

A federal judge in Washington, D.C. temporarily halted the freeze on federal loans, grants, and other financial assistance outlined in Monday’s memo. This ruling stated that existing federal grants and financial agreements must continue uninterrupted until at least Monday, February 3, 2025. However, new funding opportunities could remain limited or blocked.

Many grantees were still unable to sign into payment portals for HUD and DOJ, and therefore unable to draw down funds. Grantees were able to log in to their HHS portal but saw a message that payments may be delayed due to the memo.

A brief two-sentence OMB memo was released that stated, “[Monday’s memo] is rescinded.”

Press Secretary Karoline Leavitt tweeted:

“This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.”

Despite this statement, rescinding the memo effectively ends the immediate freeze that was supposed to take effect Tuesday at 5:00 PM. However, the executive orders that were referenced in the rescinded memo remain in place. These orders mandate the defunding of programs related to DEI, gender-affirming services, and other initiatives—though they do not specify the exact mechanisms for implementation.

• Funding Unfrozen: As of now, funding for existing grants should not be frozen. Grantees should now be able to access all payment portals.
• New Funding May Still Be Blocked: As of now, some new Notice of Funding Opportunities and/or pending grant applications remain limited, unclear, or unavailable.
• Ongoing Review of Federal Programs: The Trump administration is continuing to assess federally-funded programs, loans, and contracts, particularly those related to DEI, gender-affirming services, and similar initiatives, to determine how they can continue to ensure they align with their agenda. RHYA programs were included on the list of programs OMB plans to review (see highlighted portions on page 20), as well as many other vital programs.
• Issues Accessing Funds Still Persist: Many providers are still unable to access payment portals for agencies like HUD and DOJ. While the HHS portal is back up, providers may experience delays in funding.

The Trump administration has made it clear that this is not over, and they will try to limit funding again. We will continue to do everything we can to protect vital federal funding—including funding that supports our youth experiencing homelessness and youth homelessness providers.

Everyone deserves a home and endless possibilities to thrive. We will continue to work hard to make that happen.

We still need you to continue speaking up and pushing back on these actions. Keep emailing and calling your Members of Congress to speak out against these actions.

Please let us know if you are not able to draw down funds for specific federal programs. Please share additional impacts of the federal freeze on your program by emailing Trinady at Trinady.Maddock@nn4youth.org.

Stay up to date on this issue along with others impacting youth homelessness providers by signing up for our listserv.