Jesse Bedayn
According to information and documents obtained by the Associated Press, the Trump administration has stagnated funding primarily intended for funding primarily intended for affordable housing developments around the country.
The move is part of a freeze on funding, reduced staffing and cancellation of contracts by the U.S. Housing and Urban Development Agency’s Trump administration, and part of a change that has instilled widespread uncertainty in the affordable housing industry.
Approximately $60 million is intended to go to small community development nonprofits with small grants. This money is often used as seed funding for affordable housing projects, turning the concept into a viable development, which in turn brings out more public and private investments.
Congress has selected three nonprofit organizations to distribute grants, but HUD said in a letter it has cancelled contracts with two organizations that distribute $60 million. It’s already pushing millions into the Twilight Zone with funds promised or yet to be awarded to small nonprofits.
“Many of these organizations have already committed funds to pay workers, such as HVAC technicians, local contractors and homeowners,” said Shaun Donovan, CEO of Enterprise Community Partners, one of two groups whose contracts have been cancelled.
“They have to stop that job right away. It sacrifices local jobs, hinders the creation of affordable homes, and stalls opportunities in hundreds of communities.”
A HUD spokesman said that the programme, called Section 4, has continued and has not been cut, but that “the department has consolidated several grants, but others still exist.”
It remains unclear how, when and when the funds would reach small nonprofits, which disrupt their work.
“To know me means assuming that the money isn’t coming, and that means I have to pivot,” said Jonathan Green, executive director of a Mississippi nonprofit that builds a 36-unit affordable housing development in Biloxi.
Green said the roughly $20,000 grant is money intended to pay for environmental reviews that could currently cost more than $10,000, as well as a license and permission. It threatens discussions with potential partners and investors who want to see all the previous work that Greene was originally done.
“My fear is that if the project is completely stopped, it may never start again,” he said.
This development should be in East Biloxi, where many are still empty before Hurricane Katrina in 2005. Before the ounce of dirt moved into the project, Green’s organization received ample appeals from those eager to become tenants who launched their waitlists.
It’s a position where hundreds of other small nonprofits have found themselves, and there’s investment in the line as well as grants in question. For all the dollars in grants paid by Enterprise Community Partners, local nonprofits are leveraging an additional $95 in other capital, CEO Donovan said.
Congress gave national nonprofits the task of administering grants, making hundreds of applications and evaluating them so that the government doesn’t have to do so, Donovan said.
In one of the contract termination letters obtained by the AP, HUD said the contract was cancelled under government efficiency instructions. The group’s operations said it had “failed to comply” with Trump’s executive orders targeting diversity, equity and comprehensive initiatives. The letter also allows the organization to challenge termination.
The local Initiative Support Corporation is another group whose contract has been cancelled.
“Without access to this seed capital, housing projects for hard work will stall families, exacerbate shortages and push suffered neighbors into overcrowding and homelessness,” the statement said in the statement.
Habitat for Humanity International is the third nonprofit that pays grants, but the organization says it has not responded to repeated requests for comments or if the agreement is cancelled.
Bedayn is a legion of the Associated Press/America Statehouse News Initiative report. Report for America is a non-profit, national service program that places journalists in local newsrooms to report on infiltrated issues.
Original issue: March 7, 2025, 1:37pm
