The purpose of this study was to identify risk factors associated with homelessness, assess the relationship between housing status and consumption of costly publicly funded resources, to identify characteristics associated with service retention, and to evaluate whether length of treatment is associated with better outcomes. The target population was homeless and formerly homeless adults with SMI enrolled in community mental health services at the Downtown Emergency Service Center SAGE mental health program located in Seattle. The sample consisted of 380 SAGE patients who had continuous enrollment in 2005. These patients formed the cohort for the study. Agency records for these patients were reviewed for a 3-year period (2005-2007). The study utilized a non-experimental retrospective cohort study design. Multiple logistic regression, hierarchical multiple regression, two-way repeated measures ANOVA, and Cochran's Q test were used to analyze the data. Homelessness was associated with African American race, substance use, lower income, and younger age. Patients who were homeless spent more time in jail and required more mental health staff time compared with patients with stable housing. Patients with schizophrenia were more likely to retain services and African American patients were less likely to retain services. Overall, patients who remained enrolled in services from Year 1 to Year 3 had improved housing stability, fewer days of incarceration, and required less staff support. The overrepresentation of African Americans among patients who experienced homelessness suggests that racism could be a factor contributing to homelessness for this racial group. Further research is needed to assess the relationship between race and homelessness.