After more than two years of work, opt-out enrollment for the Family Self-Sufficiency program is finally headed for a national pilot! Compass Working Capital's Justin Kasian breaks down what it authorizes, what it preserves, and what HUD has to do before families can enroll.

On July 11, the 21st Century ROAD to Housing Act became law. Within this landmark legislation is Section 404: the Helping More Families Save Act, a provision we proudly helped introduce in March of 2024

It took us more than two years to get here. Broad, bipartisan support is never a guarantee that a bill survives to the end, and a great deal of popular legislation does not. This did, and was included in the first comprehensive housing package to become law in roughly three decades. Through every round of negotiation and every revised version of the package, it remained. Both chambers kept it, as did both parties. That consistency reflects how much opportunity our elected officials see in the Family Self-Sufficiency program.

The provision authorizes the Department of Housing and Urban Development (HUD) to test an opt-out approach to FSS. Up to 25 public housing authorities and multifamily providers may volunteer to participate, serving as many as 5,000 families. We want that group to span urban and rural communities nationwide to test how the model scales across settings. Once HUD establishes the pilot, it will have one year to select participating entities, six months to open escrow accounts, and at least five years to administer them.

The logic behind opt-out enrollment comes from retirement policy. Automatic enrollment in employer-sponsored plans seemed like a technical adjustment when it was introduced. It became one of the most consequential reforms in the history of American retirement savings because it shifted the burden of getting started from the individual to the institution. Families eligible for FSS face a similar barrier. Many never learn the program exists, and among those who do, the effort required to evaluate and enroll is often enough to stop them. Opt-out enrollment removes that step while leaving the choice fully intact.

Several points warrant emphasis. This does not alter traditional FSS programs, which will continue to operate exactly as they do today. Participation is voluntary for housing providers, with no penalty for declining. Families may opt out at any time without consequence to their housing or their benefits. And the pilot carries no appropriation, so it cannot draw down FSS funding.

The future of FSS will be shaped entirely by HUD. The department is now responsible for launching a demonstration, and we have begun meeting with staff there to offer our support and resources, whether it be our two decades of expertise in administering FSS, operational lessons from our own opt-out work in Chicago, or our vast network of providers standing ready to engage. The selection process will be HUD's to design and announce, and when it is ready, we will put it in front of every provider we reach.

That is the assignment in front of all of us. A demonstration is only worth as much as the evidence it produces, and evidence is only persuasive when the process behind it is sound. We are committed to helping HUD get this right, and we intend to follow the findings wherever they lead.