Building a Stronger Foundation for Recovery Housing in Minnesota | Recovery

Stable housing is one of the most important building blocks for recovery from substance use disorder. That’s especially true for people who are exiting treatment and entering one of the most vulnerable times in their recovery journey.

Without stable housing, people are at much greater risk of relapse, hospitalization, or incarceration. That’s why Minnesota is reshaping how it supports, funds and oversees recovery residences (formerly known as sober homes).

Minnesota’s new recovery residence model is more than a change in terminology; it’s a system-wide shift toward better care, stronger protections for clients, and clearer funding paths for providers and residents alike. But with any major reform, we recognize there are growing pains.

Some providers are facing uncertainty about their future, particularly those who rely on the Free Standing Room and Board program, which is being phased out. DHS is here to help guide the transition and provide support along the way.

For many years, sober homes operated with little oversight and limited connection to public funding streams. Many well-intentioned providers have done incredible work, often with few resources. However, without consistent standards or a sustainable funding model, both clients and providers were left in a vulnerable position.

Beginning January 1, 2027, certified recovery residences will be able to enter into HSP agreements directly with DHS. This is a significant change from the current system, where HSP contracts are typically managed by counties or Tribal governments.The Free Standing Room and Board program was originally designed to fill a gap, particularly in rural areas where residential treatment is scarce or unavailable. But it was never meant to serve as a permanent funding mechanism for recovery housing. Since the program is directly tied to the individual’s treatment needs, it does not provide the kind of long-term stability that people in recovery need.

In 2025, the Minnesota Legislature acted to change this. At DHS’s recommendation, lawmakers voted to end the Free Standing Room and Board program by June 30, 2027 and, instead, create a pathway for certain certified recovery residences to become eligible for the Housing Support Program (HSP) — a more stable and equitable source of funding.

The Housing Support Program (HSP) is a state-funded program that pays for room and board costs for adults with low incomes who have a disabling condition or are 65 or older. Approved Housing Support providers receive payments on behalf of eligible recipients, and funds are used to pay for rent, utilities, food, household supplies, and other housing-related expenses.

Beginning January 1, 2027, certified recovery residences will be able to enter into HSP agreements directly with DHS. This is a significant change from the current system, where HSP contracts are typically managed by counties or Tribal governments.

To qualify, residences must meet certain certification standards and comply with existing HSP setting requirements. Once certified and approved, providers will receive a monthly room and board payment (determined annually) for each eligible resident. These funds will bring much-needed financial stability to recovery residences across the state.

Importantly, this model increases independence and choice for residents. If a person decides to stop treatment or change treatment providers, they do not have to move or lose their HSP benefit.

We know that this transition has created uncertainty for some. We hear and understand the frustration. That’s why DHS is working to educate providers, counties, and Tribal partners about other options and funding sources that may help bridge the gap until 2027. Some examples include:

• Opioid Settlement Funds: Cities and counties have access to funds to combat the opioid crisis, and supportive housing is an approved use. Providers can connect with local officials to explore opportunities.
• Small Cities Development Program: This federal grant program helps smaller cities, townships, and counties rehabilitate housing for people with low to moderate incomes.
• Recovery Housing Program: Larger cities and metro areas can tap into Community Development Block Grant funds to support decent, stable housing for low-income individuals in recovery.

DHS has also been working with providers who did get approved for Free Standing Room and Board to educate about compliance requirements and to share updates about upcoming changes to the program. DHS has published a website to help these providers which can be found here: mn.gov/dhs/partners-and-providers/program-overviews/fsrb/.

We believe that this new model will better support people in recovery by ensuring more stability, flexibility, and oversight. It also helps protect the integrity of our public programs. Recent legislation signed by Governor Walz includes new anti-fraud measures and billing reforms to ensure taxpayer dollars are used responsibly and effectively. We all benefit when resources are directed to the people and programs that need them most.

At DHS, we remain committed to walking alongside our recovery housing providers, community leaders, and Tribal partners through this transition. By working together, we can build a stronger, safer, and more equitable recovery housing system — one that supports not just sobriety, but long-term healing and stability.

Teresa Steinmetz is assistant commissioner of the Behavioral Health Administration at the Minnesota Department of Human Services.

Last Updated on November 11, 2025