Homeless Persons Housing and Supportive Services Act of 1985

Homeless Persons Housing and Supportive Services Act of 1985 - Directs the Secretary of Housing and Urban Development to conduct a demonstration program to determine: (1) the feasibility of assisting nonprofit organizations in providing housing and supportive services for homeless persons; (2) the cost of acquiring, rehabilitating, and operating such housing and of providing supportive services; and (3) the social, financial, and other advantages of such housing and supportive services as a means of assisting homeless persons and as an alternative to continued institutionalization of handicapped persons.

Authorizes the Secretary to provide any eligible nonprofit organization: (1) annual payments of up to 80 percent of the annual operating expenses of such housing for not more than ten years; (2) technical assistance; and (3) a non-interest bearing advance equal to the cost of acquiring and rehabilitating such housing. Waives repayment of such advance if the organization uses the housing for homeless persons for at least ten years after initial occupancy. Requires each organization receiving assistance to agree to: (1) assess the supportive services required by housing residents and employ a full-time residential supervisor to provide such services; and (2) use the housing for homeless persons for at least five years after initial occupancy.

Requires each homeless person residing in housing assisted under this Act to pay as rent the amount such person would pay as rent for public housing under the United States Housing Act of 1937.

Requires the Secretary to report to the Congress after FY 1986, 1987, and 1988. Limits the annual budget authority for advances and annual payments under this Act. Prohibits the Secretary from making any advance after September 30, 1988.