The Massachusetts Department of Mental Health arranges supportive housing for homeless clients. It uses Special Homeless Initiative dollars for services that help tenants retain their housing. We tracked housing histories for over 600 DMH clients in the Boston area. Analyses show that housing plus supportive services keeps people housed, and reduced hospital days per housed tenant from 102 in the two years before housing to 7 in the two years after housing. Hospitalization costs fell about $20,000 per year per housed client. By funding this type of housing for its homeless clients, DMH can both do good and do well.