Housing Secretary Marcia L. Fudge on Thursday unveiled nearly $5 billion in new grants to states and local governments across the country for rental assistance, the development of affordable housing and other services to help people experiencing or on the verge of homelessness.

The infusion of money to reduce homelessness, part of the $1.9 trillion coronavirus relief package that President Biden signed last month, is the latest example of how the administration is using the American Rescue Plan to enact a sweeping anti-poverty agenda amid the pandemic.

“Let me be clear," Fudge said. "These funds could not come at a more critical time.”

The former congresswoman from Ohio appeared over Zoom with Sen. Sherrod Brown (D-Ohio), Michigan Gov. Gretchen Whitmer (D) and Birmingham, Ala., Mayor Randall Woodfin (D).

The grants, which must be spent by 2030, can be used to provide temporary or permanent housing, including buying and converting hotels and motels so people who are homeless could have a more private and safe place to live than in congregate shelters, Fudge said. The grants can also pay for housing for people fleeing domestic violence. The money will be allocated through a Housing and Urban Development program designed to create affordable housing for low-income families.

This $5 billion in grants is the first of two funding streams to address homelessness in the American Rescue Plan. In the coming weeks, Fudge expects to announce how an additional $5 billion in emergency housing vouchers will be allocated.

“With this strong funding, along with additional emergency rental vouchers that we will be announcing soon, communities across the country will have the resources needed to give homes to the people who have had to endure the covid-19 pandemic without one,” Fudge said.

While these dollars deliver near-term relief to homeless individuals and families and those at risk of losing their homes, Fudge said Biden’s $2 trillion American Jobs Plan, unveiled last week, would bring additional funding necessary to address homelessness and housing instability. Biden’s jobs and infrastructure plan would include $213 billion for housing programs, including $40 billion to improve public housing.

The nation’s homeless population grew to 580,000 individuals, up 2 percent from the previous year, according to HUD’s latest count, taken on a single night in January 2020.

The number, released last month, does not factor in the effect of the pandemic, when millions of Americans lost their jobs, fell behind on rent and faced the possibility of eviction despite state and federal moratoriums. Most at risk of being evicted are Black and Latino households, according to multiple studies.

“We know the pandemic has only made the crisis worse,” Fudge said. “So, while Americans were told to stay safe by staying home last year, more than half a million individuals and families had no way to do so because they did not have a home.”

Fudge, in a White House news briefing last month, said she expects to use the stimulus money to get as many as 130,000 homeless people off the streets over the next 12 to 18 months.

Much of the money will target communities in California, New York, Florida and Texas. More than half of all people experiencing homelessness live in those four states, according to the 2020 count. One in four homeless individuals in the country lived in either New York City or Los Angeles.

President Donald Trump in 2019 had ordered White House officials to address homelessness in Los Angeles and other cities, citing years of failed Democratic leadership that he said led to sustained poverty and crime. Among the ideas that were being considered: razing tent camps for the homeless, creating new temporary facilities and refurbishing existing government facilities.

Fudge said 651 grantees will be notified via letters over the next week on how to access the funds. As the former mayor of Warrensville Heights, Ohio, Fudge said local jurisdictions are best positioned to decide how to use the money. But she said she believes permanent housing should be prioritized over congregate homeless shelters and that the majority of the funding will be used to build as many as 32,000 housing units.

“Shelters are not our answer. We do not want them to build shelters,” said Fudge, calling shelters “unsafe as it relates to covid” and unfit for providing people the dignity they deserve. “We’re hopeful the shelters are going to go away as a consequence of what we’re doing today.”

She said the Biden administration also plans to level the playing field for Americans who want to buy a home by providing down payment assistance for people to move from public housing to homeownership.

“We will make sure those who can afford a mortgage are put in a position to be able to buy a home,” Fudge said. “Right now we have banks who don’t want to lend to people to buy a home for less than $50,000″ — homes, she said, that “poor people” can afford, with monthly mortgage payments often lower than rent.

Brown said that in Cleveland and other communities outside of expensive coastal metropolises, federal down payment assistance would go a long way toward helping more low-income families attain homeownership.

“That will mean we’d be more likely to attract grocery stores and transit stops that will make their lives better,” he said.

Fudge said she is optimistic that the Biden administration will be able to “eradicate homelessness” by building more permanent housing and making homeownership accessible to more low-income Americans.

“I’m working in an administration where the president and the vice president have made it a priority and have basically said to me, ‘Let’s find a way to do it,’ ” she said.