HUD announces $100 million in new PRO Housing funding to cut red tape to housing production, and launches $250 million challenge for transformative housing investments
The U.S. Department of Housing and Urban Development (HUD) today announced the availability of $100 million in competitive grant funding to cut red tape, build more homes, and lower the costs of renting and buying a home. Through HUD’s Pathways to Removing Obstacles to Housing (PRO Housing) program, communities across the nation are eligible to apply for funding to remove barriers to local housing production. Today’s announcement is part of the Biden-Harris Administration’s whole-of-government work to build more homes and lower housing costs, as outlined in today’s White House fact sheet. It builds upon actions taken through the Biden-Harris Administration’s Housing Supply Action Plan and HUD’s Strategic Plan to increase housing supply, lower costs for families, ensure equitable development, and build climate resilient, sustainable communities.
“This funding is designed to cut red tape, and make sure that we’re building more homes, especially affordable homes, with urgency because people need help now,” said HUD Acting Secretary Adrianne Todman. “The Biden-Harris Administration has made it a priority to reduce housing costs by increasing our nation’s housing supply and our partnerships with local communities are critical to achieving this goal.
A first of its kind program, PRO Housing helps communities continue to address restrictive land use or regulatory policies; improve and implement housing strategies; and facilitate the construction of new housing and repairs to existing homes and cut energy costs. Grants to local governments, states, metropolitan planning organizations (MPOs), and multijurisdictional entities will range from $1 million to $7 million.
The Notice of Funding Opportunity (NOFO) announced today is the second round of the PRO Housing competition. Earlier this summer, HUD awarded $85 million to communities across 19 States and the District of Columbia. Winners of the PRO Housing competition will update state and local housing plans, revise land use policies, streamline the permitting process for housing construction, and take other actions to create more housing-forward communities. Grants will also be used to preserve existing affordable housing units, provide development subsidies to create new affordable units, and increase access to homeownership.
Common barriers to housing identified in the round one PRO Housing applications include the high cost of land and development, lack of available units, underutilized vacant land and property, aging housing stock, inadequate infrastructure, displacement pressures, risks of climate-fueled extreme weather or environment hazards, high energy costs, and outdated land-use and permitting policies and processes.
“The communities who were awarded PRO Housing funding are already doing incredible work to modernize local policies, invest in communities, and build more homes. What makes this program unique is its ability to support and accelerate locally-driven planning, implementation, and development efforts,” said Marion McFadden, Principal Deputy Assistant Secretary for Community Planning and Development. “Round two of the competition prioritizes communities with acute need for affordable housing that have already demonstrated a commitment to overcoming local barriers, primarily by having enacted improved laws and regulations.”
The deadline for applications for round two of the competition is October 15, 2024. Learn more information about the PRO Housing program.
HUD Launches Legacy Challenge
Today, HUD is also launching a $250 million “Legacy Challenge” for transformative housing investments. Communities that receive direct annual awards through the Community Development Block Grant program to leverage low-cost, low interest loans for transformative housing investments. This program is a key lever that enables communities to take on legacy projects that will transform and revitalize neighborhoods. Up to $250 million in funding will be made available through the Section 108 Loan Guarantee to make transformative housing-forward changes in local communities across America.
HUD Acting Secretary Todman stated that “I’m challenging our nation’s mayors and governors to use this unique funding mechanism to build new housing.”
This funding can be used to make transformative changes in local communities through:
- Adaptive reuse, including commercial-to-residential conversion
- Preservation and rehabilitation of existing units
- Infrastructure to support housing production such as utility installation or upgrades
- Manufactured housing, including facilities to build new homes
- Eligible housing uses within mixed-use or transient oriented development projects
- Revolving loan pools to support local housing development
For communities that express interest by November 1, 2024, HUD will offer additional repayment flexibilities and waivers to streamline program requirements. HUD will invite applicants to participate in a technical assistance cohort and provide tools to support application development. On August 29, 2024, HUD will host a kickoff webinar to share more about the Legacy Challenge. To learn more and register for the webinar, please visit HUD’s website.