Upon its release, Halfway House was met with generally favorable reviews from music critics. AllHipHop's Greg Watkins gave the album a seven out of ten, saying "While Halfway House takes a slight dip from the high standards set forth by the Mood [Muzik] series, it is still a respectable effort. Joe Budden proves that he is still one of the games best kept secrets regardless of a release date." Nathan S. of DJBooth.net gave the album a four out of five, saying "Joe Budden is to album delays what Snoop is to weed smoking – just about everyone does it now and again, but not like these guys. These delays seemingly stem from Budden's refusal to put out an inferior product, which is what makes him so good, but that kind of perfectionism can be paralyzing. Let's just hope the next time we hear from Budden it will be because he released Padded Room, not ended up in one."
TC of The Smoking Section gave the album a 3.5 out of five, saying "Much to Budden's credit, Halfway House serves as one his more focused offerings, allowing more room for song structure opposed to the long-winded diatribes he's made his forte. Still with yet another album completed stuffed with mood music, and one named Padded Room looming on the horizon, the prognosis for the removal of the straitjacket that allows him to be Joe Budden while simultaneously restraining his artistic growth, is still to be determined." Punknews.org reviewer, Anchors, gave the album five stars out of five, saying "That never-quit attitude has been Budden's trademark for years, and it makes him somewhat of an anomaly in 2008. There's no niche for that kind of approach. He's too intelligent for the gangsta-rap tag and too gangsta for the backrap-rap title. He's an East Coast rapper with Tupac's West Coast introspection. He's a Jersey City rapper with Biggie's Brooklyn storytelling."