The city of Dayton is diverting up to $750,000 from its general fund to temporarily cover the cost of a major homeless housing program, so that 330 local households are not evicted next month.

The housing program is more than a decade old, with the U.S. Department of Housing and Urban Development sending an annual grant to the city of Dayton, which contracts with Miami Valley Housing Opportunities to run the program.

But according to a city document, “Due to various timing delays related to the federal government budget process, (HUD) has advised the city that the award for the Fiscal Year 2012 Shelter Plus Care Grants will be delayed several months.”

The individuals and households involved — who suffer persistent mental illness, AIDS and other diseases — currently receive rental subsidies that allow them to live in private landlord housing throughout Montgomery County, according to city officials. The existing funding for those subsidies ends this week.

City Manager Tim Riordan said Dayton “believes very strongly that it will be reimbursed” by HUD, but to protect itself, the city is paying MVHO on a month-to-month basis and has identified a city equipment fund and a city development fund that would share the losses if the city is not reimbursed.

“This is sort of an unusual circumstance,” Riordan said. “We don’t want to end up having 330 families evicted, and we believe this is a risk worth taking.”

Aaron Sorrell, Dayton’s director of planning and community development, said the partners in the program will try to protect themselves from financial losses in two ways. Until new federal funding is in place, housing units that become vacant in the program will not be filled. And the program will be moved to a later annual start date to avoid problems with frequent federal budget delays.

Dayton City Commission on Wednesday unanimously approved the ordinance to give MVHO an advance of up to $750,000.

“This (money) is extremely critical for the people we serve,” said Debbie Watts Robinson, CEO of MVHO. “As Commissioner (Nan) Whaley mentioned, we do serve the most vulnerable population in the community. … We had no other options.”

Jessica Jenkins, a community development analyst for the city, said if this population was put on the street, it would likely have ripple effects that would strain police and the local mental health system.

“It’s a shelter plus care program, so people are engaged in case management, they’re getting services to help them live stable and independently, as opposed to draining other resources from our system,” Jenkins said.