To Al Edwards, the permanent residents of Alpha Omega Veterans’ Services are like family.
“I tell my veterans I love them all the time,” said Edwards, the group’s executive director. “We had a veteran die here, and I traveled down to Tupelo, Mississippi, to go to his funeral. If they get sick and go to the hospital, I’m going up to visit you. You’re going to see me.”
Alpha Omega has been helping Memphis veterans transition out of homelessness since 1987. Now, it’s one of several Memphis nonprofits bracing for a gap in the funding they receive from the U.S. Department of Housing and Urban Development — potentially leading to program cuts and layoffs.
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Every year, HUD awards billions of dollars to local groups working to combat homelessness. But 2026 funding has been significantly delayed by several unsuccessful attempts from the Trump administration to drastically change the grant application rules.
These attempts — now blocked by a federal judge — have delayed the timeline for grant approvals and disbursals by months.
“Everything is super behind,” said Stephanie Reyes of the Community Alliance for the Homeless, which coordinates HUD grant applications in the Memphis area. “We should not be starting a new year without these grant agreements in place already.”
Applications for this year’s grants close on Feb. 9, but it’s still unknown when they will actually be awarded. The delay means that several Memphis groups, including Alpha Omega, may run out of money before the funding they rely on is renewed for 2026.
“It has been a very stressful time for our veteran clients, for our staff, and for the leadership here,” Edwards said. “We are seriously struggling right now.”
‘They join a community’
Alpha Omega has three main programs: It operates one transitional shelter and owns two apartment complexes in Memphis, where it provides permanent supportive housing to veterans. Many of these permanent residents are seniors or have disabilities that prevent them from working. Edwards says that about 30 veterans currently live in each apartment complex.
“There are clients that we have who just do not make enough money to go out here and get their own place. But we take care of them,” Edwards said. “It’s more than just a place where veterans come to get off the street. They join a community.”
While it owns both apartment buildings outright, Alpha Omega relies on federal money to keep up with maintenance, pay the utility bills and employ on-site support staff. Each building is funded by a separate HUD grant. One expires every year in March, while the other expires in April.
In a typical year, HUD grants would be awarded well before the previous year’s funding is exhausted. But 2026 isn’t a typical year — and neither was 2025.
Last year, the record-breaking federal government shutdown delayed Alpha Omega’s HUD grants until May. The resulting funding gap meant Edwards and his leadership team had to get creative in order to keep the organization afloat.
“We just had to beg for donations,” he said. “I ended up having to go to a bank and get a line of credit just to pay bills.”
Alpha Omega is still paying off that line of credit nearly a year later — and won’t be able to get another one if funding is delayed again.
Preparing for the worst
A funding gap this year isn’t guaranteed — HUD has not shared when it expects to distribute its 2026 grants, and did not reply to several emailed questions about this timeline. In a best-case scenario, it could release money in early March as soon as an ongoing federal lawsuit concludes. But groups like Alpha Omega, which already operate with extremely tight finances, have to prepare for the worst.
“We will be at the mercy of donors” if a funding gap occurs, Edwards said. “And if donors are not able to get us through that period, then we will have to look at cutting services, potentially laying off employees, or doing whatever we have to do to lessen or minimize our expenses.”
Since Alpha Omega owns its apartment buildings, it’s unlikely that a funding gap would force the group to evict permanent residents this spring, Edwards said. But CAFTH says that other permanent supportive housing projects aren’t so lucky. Many rely on federal dollars to pay their clients’ rent in privately-owned buildings, meaning even a one-month gap could lead to clients being evicted.
“It’s very hard to find landlords that will serve this population,” said Reyes, referring to people transitioning out of homelessness. “If you don’t have the money to fulfill these leases, not only are you damaging your relationships with your clients, but you’re damaging the years of landlord relationships that you’ve been building.”
Local nonprofits are also watching a larger challenge appear on the horizon. In recent months, the Trump administration has signaled a broader agenda of moving away from permanent supportive housing entirely.
“HUD fully stands by our objective to overhaul America’s failed homelessness system, which has relied almost exclusively on permanently warehousing the homeless at exorbitant taxpayer cost,” an agency spokesperson said in an email to MLK50.
The agency refers here to permanent supportive housing, an evidence-based approach to chronic homelessness, which provides shelter and supportive services to unhoused people for as long as they need them. Edwards said that a shift away from this type of program would be devastating for Alpha Omega’s long-term residents.
“Stability is something that is very valuable and important to veterans who have mental health issues,” he said. “The drastic change that they’re talking about is going to have such a negative impact on people’s lives.”
‘This organization belongs to Memphis’
Alpha Omega is already working to diversify its funding sources so it can become less beholden to the ever-shifting requirements and timelines associated with federal dollars. But that transition will take time — currently, 80% of the group’s budget comes from its three federal grants: two from HUD and one from the U.S. Department of Veterans Affairs.
Other sources of revenue include private donations, grants from local philanthropic organizations and two small farms where it grows produce to sell at the Cooper-Young Farmer’s Market. The farms are home to chickens, honeybees, and one recently added a hydroponic trailer where heads of lettuce grow from vertical panels.
But Edwards says his biggest barrier to grassroots funding is just getting the word out that Alpha Omega exists in the first place.
“I retired from the military in 2010 and returned to Memphis, and it wasn’t until eight years later that I even heard of this place,” he said. “What that tells me is that a lot of people just don’t know about this organization.”
The challenges Alpha Omega faces aren’t unique — many nonprofits, especially those that serve unhoused people, suffer from tight budgets and a lack of visibility. But Edwards believes that after nearly 40 years in operation, his organization is something special: a long-standing institution with a proven track record of serving the community.
“This organization is something that Memphis should be proud of. As proud as we are of St. Jude,” he said. “We are an organization that is saving veterans’ lives.”
Natalie Wallington is the housing reporter for MLK50: Justice Through Journalism. Email her at natalie.wallington@mlk50.com.
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