Chronically homeless individuals often have extensive health, mental health and psychosocial needs that pose barriers to obtaining and maintain supportive housing. This study aims to qualitatively explore supportive housing providers’ experiences and challenges with housing chronically homeless individuals and examine opportunities to improve supportive housing systems of care. In 2014, we conducted qualitative in-depth interviews with 65 programme administrators and case managers of supportive housing programmes in Chicago, IL. Data were analysed using an inductive thematic content analysis. Analysis revealed four themes that capture the primary challenges faced by housing providers: housing priorities, funding cuts, co-ordinated entry and permanency of housing. Housing for the chronically homeless has been prioritised, yet service providers are being expected to provide the necessary services to meet the needs of this population without commensurate funding increases or agency capacity. Additionally, case managers and administrators discussed the tension over housing tenure and the permanency of supportive housing. Findings provide qualitative insight into the challenges providers face implementing supportive housing for chronically homeless individuals.