In response to a Congressional request, the General Accounting Office studied the process that the Department of Housing and Urban Development (HUD) uses to select projects for the homeless for funding, whether this process is consistent with statutes and community priorities, whether communities face any common problems when applying for HUD funds, and the actions needed to correct any problems. Study results, using data from many sources, indicate that HUD selects projects for funding on the basis of a three-step process that is consistent with statutory requirements, and it does not distinguish between new and renewal projects. Most projects that communities ranked as high priority received funding in 1998 and 1999, and most applicants understood how to apply for HUD grants. More than one-third of communities, however, had difficulty in understanding all requirements or completing the paperwork. Community representatives identified some problems related to securing funding, and suggestions are made to remedy these problems. Four appendixes contain a description of HUD's homeless assistance programs, data on HUD competitions and the process for determining homeless assistance need, and comments on this report from HUD. (SLD)