HUD grants $85 million for affordable housing

The Biden Administration is awarding $85 million in grants to 21 local governments to build affordable housing in what officials call a "first-of-its-kind" program.

The Pathways to Remove Obstacles to Housing, or PRO Housing program, will deliver an additional $100 million out of the government's fiscal year 2024 budget in an application process, officials said. The Department of Housing and Urban Development made the announcement Wednesday with Vice President Kamala Harris. 

Cities, counties, states and other jurisdictional entities must describe how they'll use the funds to address affordable housing barriers in zoning and permitting; financing gaps; infrastructure upgrades; and preservation of aging housing. HUD said combined requests from 175 communities exceeded $13 for every $1 available. 

"We have lots of other money to actually build housing," a senior housing official told the media, mentioning other HUD programs. "So this is not at all the only money that we have to address housing. We have billions of dollars here to help build more affordable housing."

The Biden Administration asked for another $100 million in PRO Housing grants in its fiscal year 2025 budget, among $258 billion it's proposed for housing efforts. 

The awards come a day after HUD announced an unrelated $142 million in grants and loans, under its Green and Resilient Retrofit Program, to improve over 2,200 properties for low-income residents. The GRRP, created by the Inflation Reduction Act, has $754 million in funding and has aided over 16,400 rental properties. 

In another unrelated move, the U.S. Department of the Treasury Monday said its Community Development FInancial Institutions Fund will provide $100 million over three years to support affordable housing production. Officials emphasized the Treasury announcement related to financing tools, while PRO Housing resources will be realized this summer. 

Some of the PRO Housing funds will go to projects already underway, officials said. Some of Milwaukee's $2.1 million award will address aging housing, while some of Denver's $4.5 million will be used to upgrade utilities. While major cities won awards, Ketchum, Idaho, with a population under 4,000 residents, won $2.5 million.

"When people are doing affordable housing projects, and they find there's an unexpected need for a new electrical line or sewer line, they can come and have infrastructure funding through PRO for their infrastructure remediation needs," a senior housing official said. 

The effort is part of President Biden's moves to address the nation's housing crisis, including a pending bill to provide $25,000 in down payment assistance to first-generation homebuyers. 

Treasury Secretary Janet Yellen Monday separately suggested the Federal Home Loan Banks improve upon their affordable housing program, to expand their required net income contributions from a required 10% to 20%. Some banks have already upped their AHP funding to 20% voluntarily. 

The Federal Housing Finance Agency last week requested public input on the Banks' AHP, which critics have called overly complicated. The FHLBs' contribution to affordable housing amounted to around $350 million last year.