Summary
The U.S. Department of Housing and Urban Development (HUD) administers over $60 billion in annual spending, including more than $10 billion in competitive and formula grants for community development, affordable housing construction and preservation, homelessness services, lead hazard remediation, and housing for special populations. In 2026, HUD's grant portfolio spans formula programs that flow to state and local governments, competitive grants for specific housing missions, and capacity-building awards for nonprofits and public housing authorities.
Community Development Block Grant (CDBG)
The Community Development Block Grant program (CFDA 14.218 for entitlement communities; 14.228 for states and small cities) is HUD's largest non-housing grant program, distributing approximately $3.3 billion annually by formula to over 1,200 metropolitan cities, urban counties, and states. Entitlement communities — cities over 50,000 population and urban counties over 200,000 — receive direct allocations based on a formula using poverty rates, overcrowded housing, and population. States receive remaining funds and distribute them to non-entitlement communities through competitive state CDBG programs.
At least 70% of CDBG funds must benefit low- and moderate-income (LMI) persons. Eligible activities include housing rehabilitation, public facility improvements, economic development, public services (capped at 15% of the grant), and planning. Local nonprofits and community development corporations cannot receive CDBG funds directly from HUD — they must apply to their city or county's CDBG program office, which runs its own competitive application process. Cities and counties publish their Consolidated Plans and Annual Action Plans (required HUD documents) explaining how local CDBG funds will be spent; these documents are the best guide to local funding priorities. The CDBG-DR (Disaster Recovery) variant provides supplemental allocations after presidentially declared disasters for housing and community rebuilding.
HOME Investment Partnerships Program
The HOME Investment Partnerships Program (CFDA 14.239) provides approximately $1.4 billion annually by formula to states, cities, and urban counties (called Participating Jurisdictions, or PJs) to fund affordable housing. HOME funds can be used for new construction of affordable rental housing, rehabilitation of existing affordable rental and homeowner housing, down payment and closing cost assistance for first-time homebuyers, and tenant-based rental assistance. At least 15% of each PJ's HOME allocation must be awarded to Community Housing Development Organizations (CHDOs) — nonprofit organizations with demonstrated capacity in affordable housing development.
CHDOs must be certified by their local PJ and meet specific organizational requirements including board composition that includes low-income community members. Once certified, CHDOs can access the mandatory 15% CHDO set-aside, which can total $100,000 to over $1 million per jurisdiction depending on the size of the allocation. Nonprofits seeking CHDO certification should contact their city or county's Community Development or Housing department early, as certification processes vary and can take several months. Non-CHDO nonprofits can also access HOME funds as developers or subrecipients of their local PJ, but compete outside the CHDO set-aside. HOME requires all assisted rental units to remain affordable for 5–20 years depending on the activity and investment level.
Choice Neighborhoods Initiative
HUD's Choice Neighborhoods Initiative (CNI, CFDA 14.889) is one of HUD's most competitive and highest-impact grant programs, providing Planning Grants (up to $500,000) and Implementation Grants (up to $50 million) to transform distressed public and HUD-assisted housing neighborhoods into mixed-income communities of opportunity. CNI addresses housing, people, and neighborhood simultaneously — grantees must demonstrate a comprehensive transformation plan addressing education, public safety, economic opportunity, health, and civic infrastructure alongside housing redevelopment.
CNI Implementation Grants require a substantial local match and strong partnerships among public housing authorities, local governments, school districts, nonprofits, and private developers. Lead applicants are typically local governments or public housing authorities, with nonprofits and Community Development Corporations serving as co-applicants or development partners. Planning Grants of up to $500,000 are more accessible and fund the development of the comprehensive Transformation Plan required for Implementation Grant competition. HUD typically awards 5–10 Planning Grants and 3–5 Implementation Grants per year nationwide, making early relationship-building with HUD regional staff essential for serious applicants.
Section 202 and Section 811: Housing for Seniors and People with Disabilities
HUD's Section 202 Supportive Housing for the Elderly program (CFDA 14.157) provides capital advances and project rental assistance to nonprofit organizations to develop affordable housing with supportive services for low-income persons 62 and older. Section 202 capital advances effectively function as grants — they require no repayment as long as the housing remains affordable for 40 years. HUD issues a Notice of Funding Availability (NOFA) for Section 202 when appropriations are available; awards are competitive nationwide with preference given to sponsors serving the most vulnerable elderly populations. Typical awards fund 20–100 unit developments.
HUD's Section 811 Supportive Housing for Persons with Disabilities program (CFDA 14.181) provides Project Rental Assistance Contracts (PRACs) to state housing agencies, which then partner with state Medicaid and developmental disabilities agencies to create rental housing integrated into the community for non-elderly adults with significant disabilities. Section 811 PRACs subsidize rents in existing or newly developed affordable housing, allowing residents to pay no more than 30% of their income. Nonprofits developing housing for people with disabilities can access Section 811 funding through their state housing finance agency. Both Section 202 and Section 811 require HUD Form 2530 Previous Participation Certification and compliance with HUD's Fair Housing and Equal Opportunity requirements.
Lead Hazard Reduction and Healthy Homes Grants
HUD's Office of Lead Hazard Control and Healthy Homes (OLHCHH) administers competitive grant programs to reduce lead paint hazards and other housing-related health risks in low-income homes. The Lead-Based Paint Hazard Control (LBPHC) grant program (CFDA 14.900) provides awards of $2–$5 million over three years to state and local governments to assess and remediate lead hazards in homes where children under six live. Grantees provide free lead hazard control services to eligible homeowners and landlords who meet income and housing age requirements. In 2026, HUD also funds the Lead Hazard Reduction Demonstration program for higher-need communities and the Healthy Homes Production grant for addressing multiple housing hazards simultaneously.
The Healthy Homes Supplemental Funding program allows LBPHC grantees to address a broader range of housing hazards beyond lead, including mold, pest infestations, carbon monoxide, fire safety hazards, and fall hazards. State and local health departments, housing agencies, and community action agencies are typical applicants. HUD issues these grant NOFAs through grants.gov, typically in the spring, with awards announced in the fall. Jurisdictions with high concentrations of pre-1940 housing stock, high rates of childhood lead poisoning, and documented enforcement capacity have the strongest applications. CFDA numbers 14.900, 14.901, and 14.902 cover the lead and healthy homes grant portfolio.
Continuum of Care: Homeless Assistance Grants
HUD's Continuum of Care (CoC) Program (CFDA 14.267) is the primary federal grant program for ending homelessness, distributing approximately $3.5 billion annually to fund permanent supportive housing, rapid rehousing, transitional housing, and homelessness prevention for individuals and families experiencing homelessness. CoC funds flow through local Continuums of Care — geographic planning bodies that coordinate all homeless services in a community — which conduct an annual competitive process (the CoC competition) to allocate funds among member projects. Nonprofits and government entities providing homeless services apply to their local CoC for project funding, not directly to HUD.
New projects seeking CoC funding must be approved by their local CoC as part of its annual collaborative application to HUD. The CoC competition uses a scoring system that rewards Housing First approaches, strong performance outcomes (days to housing, housing retention rates), and coordinated entry system participation. Emergency Solutions Grants (ESG, CFDA 14.231) provide a separate, formula-based stream of approximately $290 million annually to states and entitlement communities for emergency shelter operations, rapid rehousing, and homelessness prevention. Nonprofits access ESG funds through their state or local ESG grantee. Both CoC and ESG require compliance with HUD's HMIS (Homeless Management Information System) data collection requirements.
Key Takeaways
- CDBG ($3.3B annually, CFDA 14.218/14.228) and HOME ($1.4B annually, CFDA 14.239) are formula programs — local nonprofits access them through city or county applications, not directly from HUD.
- Nonprofits developing affordable housing should pursue CHDO certification to access the mandatory 15% HOME set-aside; contact your local Participating Jurisdiction's housing department to begin the certification process.
- HUD's Choice Neighborhoods Planning Grants (up to $500,000) are a realistic entry point for public housing authorities and local governments seeking to transform distressed neighborhoods before competing for $50 million Implementation Grants.
- Section 202 capital advances and Section 811 PRACs are effectively non-repayable grants for nonprofits developing affordable housing for elderly and disabled populations, funded through HUD NOFAs on grants.gov.
- CoC homeless assistance grants (CFDA 14.267, $3.5B annually) flow through local Continuums of Care — organizations must engage their local CoC well before the annual HUD competition deadline, typically in the fall.