Urban social welfare policies face complex challenges in managing psychotic homeless individuals, particularly regarding facility overcapacity and psychiatric rehabilitation constraints. This study aims to evaluate the implementation of social welfare services for psychotic homeless individuals utilizing William N. Dunn’s policy evaluation theory. Employing a descriptive qualitative design, the research involved key subjects selected through purposive and snowball sampling, comprising the Head of the shelter, social assistants, and recovering psychotic homeless clients. Data were gathered via in-depth structured interviews, direct observations, and documentation, and subsequently analyzed using an interactive model consisting of data condensation, data display, and conclusion drawing. The results indicate that while the services are effective and appropriate in meeting basic needs according to Standard Operating Procedures, efficiency and adequacy remain constrained by a severe disproportion in the staff-to-client ratio (overcapacity) and the inability to provide advanced medical-psychiatric interventions internally. Equity is maintained in basic facility distribution, and staff responsiveness is highly rated. In conclusion, the policy provides tangible physical and mental stability benefits but is not fully optimal due to systemic overcapacity and bureaucratic hurdles regarding undocumented clients. The implications of this study suggest a critical need for adding social assistants, synchronizing population data for medical referrals, and establishing robust post-repatriation monitoring to ensure sustainable psychosocial recovery.