Shelter Diversion Program (SDP)

Purpose: The Shelter Diversion Program aims to prevent or rapidly end homelessness by helping people in a housing crisis identify and access safe alternatives to emergency shelter, reducing trauma and preserving limited shelter capacity. The FY 2024 expansion (funded by HCDF) builds on a prior two-year pilot to test, expand, and implement diversion practices statewide.

Additional applicant eligibility: Applicants must be either a 501(c)(3) nonprofit agency or a local unit of government based in Michigan and actively engaged with the local CoC/LPB. Applications must include a CoC/LPB letter of support, and only one application per CoC/LPB is accepted. Communities already participating in the pilot listed in the RFP were ineligible for the 2024 expansion round. Applicants must demonstrate fiscal and reporting capacity (including HMIS and quarterly financial status reports) and be current on MSHDA reporting.

Project eligibility: Projects must implement or expand a diversion model focused on households at risk of or experiencing homelessness, generally providing an intensive, short-term (around 14 days) intervention. Client eligibility is typically up to 40% of Area Median Income for the RFP round; services include problem-solving, mediation, and connections to resources. Allowable costs include new Diversion Specialist staffing (>=40% of budget), flexible financial assistance (>=10%, capped at $2,500 per household), rental assistance (>=20%, capped at three months), and administrative costs (<=10%). HMIS data entry and performance reporting are required.

Application process: For the 2024 expansion, the RFP was released 09/20/2024, proposals were due by 5:00 PM ET on 11/07/2024, awards announced by 11/21/2024, and projects to begin in 2025. Proposals (submitted by the ESG fiduciary) were emailed to the MSHDA program specialist and had to include a CoC/LPB letter of support along with a narrative addressing: Proposed Model; Performance Management and Outcomes; Organizational Capacity; and Budget/Leverage. Funds could be awarded via the established ESG fiduciary or directly to the shelter providing diversion services.