A major federal funding shift could force some Montanans who have been homeless to live on the streets again.

The U.S. Department of Housing and Urban Development has capped spending on long-term housing next year at 30% of current levels, instead prioritizing transitional housing. This year, Montana used 76% of its federal funds for permanent housing, meaning the programs could lose millions of dollars.

David O'Leary, executive director of the Montana Continuum of Care Coalition, said most providers have until mid-December to resubmit grant applications for transitional housing. He added it will have a significant effect on the state.

"There are people currently in these projects that may not be eligible for that new program," O'Leary pointed out. "With the limited resources here in Montana, they may end up back out on the streets."

The department administers the Continuum of Care program, which coordinates efforts to help people experiencing homeless. The government said by focusing on transitional housing and support services, the new policy "restores accountability to homelessness programs" and addresses "root causes" of homelessness, like addiction and mental health issues. Montana has 23 permanent housing projects funded by Continuum of Care.

Under the new plan, the department will revert mainly to programs providing housing and services for up to two years. Participants will have to work or get work training and treatment services.

Permanent housing usually does not have a time limit or work and treatment rules. O'Leary believes it is a better way to remove people from homelessness.

"It provides a stable foundation for them to address those issues that have led them into being homeless," O'Leary pointed out. "And it gives them a platform to kind of work on those things so that they become more self-sufficient."

Another challenge is the tight turnaround for providers to submit funding proposals this year. The federal government announced the policy change Nov. 13 and grant applications from individual providers are due Dec. 15. The department has not announced when the funds will be awarded, so there could also be delays.

"A lot of work has to be done, a lot of assessment and a lot of decisions have to be made in a very short period of time," O'Leary stressed.

Twenty states have sued the Trump administration to stop the cuts, accusing the administration of violating Congress's constitutional power to control spending, and saying the new conditions are illegal. Montana did not join the lawsuit.