DFPS FY 2026 Capacity Building Plan: Addressing the Foster Care Placement Gap
Released in November 2025, the DFPS Capacity Building Plan outlines how Texas will expand placement options, reduce reliance on congregate care, and strengthen family-based services for children with complex needs.
74%
Exits to Family (FY 2024)
Nearly 3 in 4 DFPS custody exits were to family members
6.1M
High-Needs Youth Investment
88th Legislature funding for services and supports
In November 2025, DFPS published the Fiscal Year 2026 Capacity Building Plan Based on the Foster Care Needs Assessment — a strategic roadmap for addressing the persistent gap between available placements and the needs of children in state care.
The Placement Challenge
Children without placement — situations where the state lacks available foster homes or specialized residential options — have been a recurring crisis in Texas child welfare. These situations often result in children spending nights in CPS offices, hotels, or other inappropriate settings.
The FY 2026 plan targets this through multiple strategies:
Expanding Family-Based Placements
DFPS is prioritizing recruitment and retention of family-based foster homes over congregate care facilities. Research consistently shows that children do better in family settings, and the federal Family First Prevention Services Act restricts Title IV-E funding for congregate placements.
Kinship as First Placement
The plan strengthens DFPS's commitment to kinship placements as the first option after removal. Staff are now required to help families identify all potential relative caregivers — expanding beyond the previous practice of contacting only three. During FY 2024, nearly 74% of exits from DFPS custody were to family.
Specialized Capacity for High-Needs Youth
A significant focus is building capacity for youth with complex behavioral health needs — the population most likely to face placement disruptions. The 88th Legislature invested $6.1 million to enhance services for high-needs youth, including $444,000 for provider technical assistance.
Community-Based Care Integration
The Capacity Building Plan operates alongside the ongoing CBC model transition, where local SSCCs are responsible for building and managing foster care networks in their regions. DFPS's role shifts to contract oversight, performance monitoring, and statewide coordination.
Measuring Progress
The plan establishes clear metrics: reduction in children without placement situations, increase in kinship-first placements, fewer moves between placements, and shorter time to permanency. Monthly data reporting — available to the public — will track these outcomes.
Source: DFPS FY 2026 Capacity Building Plan Based on the Foster Care Needs Assessment (November 2025)