People with poor mental health are more susceptible to the three main factors that can lead to homelessness: poverty, disaffiliation, and personal vulnerability. Because they often lack the capacity to sustain employment, they have little income. Delusional thinking may lead them to withdraw from friends, family and other people. This loss of support leaves them fewer coping resources in times of trouble. Mental illness can also impair a person’s ability to be resilient and resourceful; it can cloud thinking and impair judgment. For all these reasons, people with mental illness are at greater risk of becoming homeless

""Homelessness, in turn, amplifies poor mental health. The stress of being homeless may exacerbate previous mental illness and encourage anxiety, fear, depression, sleeplessness and substance use. The needs of homeless people with mental illnesses are similar to those without mental illnesses: physical safety; education; transportation; affordable housing; and, affordable medical/dental treatment. When providing care to the homeless, it is essential to create a non-threatening and supportive atmosphere, address basic needs (e.g. food and shelter), and provide accessible care. 

People with mental illness remain homeless for longer periods of time and have less contact with family and friends. 30-35 percent of the homeless, in general, and up to 75 percent of homeless women specifically, have a mental illness. 20-25 percent of homeless people suffer from concurrent disorders (severe mental illness and addictions). People who have a severe mental illness are over-represented in the homeless population, as they are often released from hospitals and jails without proper community supports in place. 

Community-based mental health services play an important role. Homelessness could be drastically reduced if people with severe mental illness were able to access supportive housing, as well as other necessary community supports. They encounter more barriers to employment and tend to be in poorer health than other homeless people. Housing outreach services that provide a safe place to live are a vital component of stabilizing the illness and helping individuals on their journey to recovery.