The use of Aid to Families with Dependent Children (AFDC) funds for homeless families was the topic of this joint hearing. The focus was on federal laws which govern the ability of states to issue emergency housing assistance to needy families with children. Presently, states are matched at a rate of 50 percent when emergency assistance is necessary to avoid the destitution of the child. There is a 30-day annual limit on these matching funds. Testimony was given by members of Congress, mayors, and advocates for the homeless. Issues relating to amending the present law included the following: (1) the 30-day limit is unrealistic as proven by the large number of families who have needed aid well past this deadline; (2) the assistance funds could be used to construct permanent housing for these families if federal law did not prohibit this use; (3) the development of temporary housing plans is a humane alternative to the present system of using shelters; (4) if more temporary housing were made available it could be turned into permanent housing later; and (5) solutions to the housing crisis should include the involvement of not-for-profit organizations rather than profit-making businesses. (VM)