The purpose of the ESG program is to assist individuals and families in quickly regaining stability in permanent housing after experiencing a housing crisis or homelessness.
Recipients, which can be state governments, metropolitan cities, urban counties and U.S. territories receive ESG funds from HUD and make these funds available to eligible subrecipients, which can be either local government agencies or private nonprofit organizations. Subrecipients that want to operate the homeless assistance and/or homelessness prevention projects must apply for ESG funds through the governmental recipient, not directly through HUD.
ESG funds are available for five program components: street outreach, emergency shelter, homelessness prevention, rapid re-housing assistance and data collection through the Homeless Management Information System (HMIS). Recipients also receive administration funds with a statutory cap of 7.5 percent. Local government recipients may carry out all ESG activities directly, whereas state recipients may only carry out activities related to administrative costs and HMIS.