HUD’s Emergency Solutions Grants (ESG) program was created by the HEARTH Act in 2009, as a revision to the Emergency Shelter Grants program. Like its predecessor program, the new ESG provides formula grants to cities, counties, territories, and states.
As reflected in the name change, the new ESG program focuses on permanent housing placement and retention. At least 40 percent of ESG funds must be used for homelessness prevention and rapid re-housing activities. Other eligible program components are street outreach; emergency shelter development, operations, and services; and certain costs associated with a Homeless Management Information System (HMIS).
All ESG-funded activities are carried out in consultation with the local Continuum of Care. States are required to subgrant ESG funds to local governments and nonprofit organizations, and local jurisdictions and territories also may subgrant funds to nonprofit organizations. All direct grantees except territories are required to match the ESG funds with cash and/or in-kind resources such as donated buildings, materials, and volunteer services. (For the purposes of the ESG program, Puerto Rico is treated as a state and is required to make the match.)