A new Denver program will provide permanent housing support and other health services, such as substance abuse treatment, to at least 125 people experiencing chronic homelessness in the city, officials announced today.

The program, called Denver Housing to Health, will take advantage of $11.75 million from six private funders and up to $5.5 million in grant money from the U.S. Treasury, according to a news release from the city’s Department of Housing Stability. 

Metro Denver is suffering from chronic homelessness exacerbated by the lack of housing access, primarily driven by soaring home and rent prices.    

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The program seeks to offer housing stability, reduce number of jail days for participants and bring down the cost of emergency federal health care costs, officials said. It deploys what’s called pay for success financing, under which a private investor provides up-front capital and then gets repaid when a project demonstrates outcomes. 

“Denver’s Social Impact Bond program proved we can break the cycle from streets, to emergency rooms, to jails and back to the streets for our residents facing chronic homelessness, and we’re going to expand those efforts,” Denver Mayor Michael Hancock said in a news release. He had joined U.S. Department of Treasury officials, as well as homelessness response and mental health service providers in announcing the program.

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“Our community is incredibly fortunate to have such strong partnerships among funders, providers and other government organizations. This is a proven strategy of providing housing first with the right supports in place for people to exit homelessness, remain housed and prosper. Together, we’re making this innovation possible,” he said. 

The grant money from the treasury department will come to Denver if the program leads to a reduction in federal healthcare expenditures. It will then be used to repay the private investors who frontloaded the cash to launch the project.

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Those eligible to participate in the program must be at least 18 years old, have a record of at least eight arrests over the last three years in Denver, and at high risk for high-cost healthcare services paid through Medicaid. Participants will be offered supportive housing provided by the Colorado Coalition for the Homeless and WellPower, with Denver Health serving as a referral source giving participants access to a range of other support services.