The Trump administration throws hundreds of affordable housing projects in limbo after contract reductions

By Jesse Bedayn

The Trump administration has blocked at least $ 60 million in funding intended largely for affordable housing developments nationally, throwing hundreds of projects in a precarious limbo, according to information and documents obtained by the Associated Press

This decision is part of a wave of financing gels, endowment cuts and contract cancellations by the Trump administration in the US Department of Housing and Urban Development, changes that have instilled generalized uncertainty in the affordable housing industry.

The $ 60 million is intended to go to non -profit organizations in community development in small grants. Money is often used as seed financing for affordable housing projects, transforming a concept into viable development and therefore attracting more public and private investment.

The congress has chosen three non -profit organizations to distribute subsidies, but Hud declared in letters that it cancels contracts with two of the organizations which, together, were to distribute the $ 60 million. This has pushed millions of funds already promised to small non -profit organizations, or to be allocated, in the twilight area.

“Many of these organizations have already committed funds to pay workers, such as CVC technicians, local entrepreneurs, property advisers,” said Shaun Donovan, CEO of Enterprise Community Partners, one of the two groups whose contract has been canceled.

“They will have to stop this work immediately. It will cost local jobs, Hobble the creation of affordable houses and will win opportunities in hundreds of communities. »»

A HUD spokesperson said the program, called Section 4, will continue and will not be reduced, but that “the ministry consolidates certain subsidies, while others remain”.

We do not know how or when funding will arrive at small non -profit organizations, which has launched their work in disarray.

“Not knowing for me means that we assume that money does not come, which means that I have to rotate,” said Jonathan Green, executive director of a non -profit organization in the Mississippi who builds an affordable housing of 36 units in Biloxi.

Green said that about $ 20,000 in dollars in subsidies were now in limbo, money that was to pay an environmental examination that could cost more than $ 10,000, and licenses and permit. This threatens the discussions that Green has with potential partners and investors who want to see all the initial work carried out first.

“My fear is that, if the project stops completely, we may never do it again,” he said.

Development is supposed to be in East Biloxi, where many remain empty after Hurricane Katrina in 2005. Before an ounce of dirt was moved to the project, the organization of Green received enough calls from people wishing to become tenants that they have started a waiting list.

This is the position that hundreds of other small non -profit organizations found themselves, with not only their grant funds in question, but also online investments. For each dollar of subsidies spent by business community partners, local non -profit organizations take advantage of an additional $ 95 in another capital, said CEO Donovan.

The congress has given national non -profit organizations the work of administration of grants, food and evaluation of hundreds of requests, so that the government does not have to do, said Donovan.

In one of the letters of termination of the contract obtained by the AP, HUD said that contracts had been canceled in the direction of the Government Ministry. He said that the group’s operations “were not in accordance with” Trump’s executive order targeting diversity, equity and inclusion initiatives. The letter also allows organizations to use termination.

The local company Initiatives Support Corporation is the other group whose contract has been canceled.

“Without access to this capital of seeds, housing projects for hard work, families will calend, will worsen shortages and push the neighbors in distress in overcrowded or homeless conditions,” he said in a statement.

Habitat for Humanity International is the third non -lucrative purpose disbursing subsidies, but the organization did not respond to repeated requests for comments or said whether their contract had been canceled.

Bedayn is a member of the body for the Associated Press / Report for America Statehouse News Initiative. Report for America is a non-profit national services program that places journalists from local editorial rooms to account for undercurrent issues.

Originally published: March 7, 2025 at 10:37 PST