The Affordable Housing Funding Landscape
Affordable housing development in the United States relies on a layered capital stack that typically combines federal tax credits, federal grants, state housing finance agency funds, local government contributions, and private debt. Understanding each component and how they interact is essential for housing developers, nonprofits, and community land trusts seeking to fund new affordable housing or preserve existing affordable units.
This guide covers the major grant and grant-equivalent funding sources available in 2026 — focusing on programs where resources are available without repayment obligations or that function as grants within a larger capital stack.
HUD Community Development Block Grant (CDBG)
The Community Development Block Grant program allocates over $3 billion annually to states, cities, and urban counties for a broad range of community development activities, including housing rehabilitation, new construction, homebuyer assistance, and supportive housing. CDBG flows as formula grants to "entitlement communities" (cities over 50,000 and urban counties over 200,000) and to states for distribution to smaller communities.
Nonprofits and CDCs (Community Development Corporations) typically access CDBG through subgrant agreements with their city or county government. Individual subgrants range widely — from $25,000 for a small rehabilitation project to $2 million for a larger housing development. Contact your city's Community Development or Housing Department for current CDBG funding cycles and application requirements.
HUD HOME Investment Partnerships Program
The HOME Investment Partnerships Program provides formula grants to states and localities to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income households. HOME is the largest federal block grant program dedicated exclusively to housing.
In fiscal year 2024, HOME received approximately $1.5 billion in federal appropriations. Participating jurisdictions (states and localities) must invest at least 15% of their HOME allocation with Community Housing Development Organizations (CHDOs) — nonprofit housing organizations that meet HUD's CHDO requirements. CHDOs can receive HOME funds for development, acquisition, and rehabilitation of affordable housing.
Accessing HOME requires working through your Participating Jurisdiction (PJ) — your city, county, or state housing agency. HOME funds are awarded through the PJ's annual action plan process and competitive application cycles.
Low Income Housing Tax Credit (LIHTC)
The Low Income Housing Tax Credit is not technically a grant, but it functions as one within affordable housing finance. States allocate LIHTCs to developers through Qualified Allocation Plans (QAPs) administered by State Housing Finance Agencies (HFAs). Developers sell the tax credits to investors (typically banks and insurance companies) to raise equity — typically $0.80–$1.00 per dollar of credit. A project that receives $1 million in annual LIHTCs over 10 years generates approximately $8–10 million in equity.
Nonprofits are advantaged in LIHTC competition: most state QAPs set aside a percentage of credits for nonprofit-sponsored projects. Applying for LIHTCs requires working with a syndicator and submitting a comprehensive application to your state HFA. The process is complex; most first-time applicants work with a housing development consultant.
Federal Home Loan Bank Affordable Housing Program (AHP)
The Federal Home Loan Banks (FHLBs) are required by law to allocate 10% of their net income to the Affordable Housing Program. AHP provides competitive grants to support the construction, purchase, or rehabilitation of affordable housing. In 2023, the FHLB system awarded over $500 million in AHP grants.
To access AHP, you need a member financial institution (a bank or credit union that is a member of the FHLB) to sponsor your application. AHP grants range from $500,000 to $2 million for competitive projects. Each of the 11 FHLBs operates its own AHP program; contact your region's FHLB to identify member institutions that sponsor affordable housing projects.
USDA Rural Housing Programs
For affordable housing in rural communities, USDA Rural Development provides:
- Section 515 Rural Rental Housing Loans: Subsidized below-market loans for affordable rental housing in rural areas. Not a grant, but functionally reduces cost of development.
- Section 533 Housing Preservation Grants: Up to $500,000 to nonprofits and public bodies to administer owner-occupied housing repair programs for low-income rural households.
- Section 523 Mutual Self-Help Technical Assistance Grants: Up to $500,000 for nonprofits to assist low-income families in rural areas to build their own homes using the "sweat equity" model.
Foundation Grants for Affordable Housing
JPMorgan Chase Foundation — PRO Neighborhoods
JPMorgan Chase's PRO Neighborhoods program has committed hundreds of millions of dollars to CDFIs and nonprofits working on affordable housing and economic mobility in underserved communities. Grants through PRO Neighborhoods range from $500,000 to $5 million for collaborative, multi-year housing and community development initiatives.
MacArthur Foundation — Housing
The MacArthur Foundation has historically been a major funder of affordable housing policy, preservation, and community development. Its Window of Opportunity initiative invested over $150 million in affordable rental housing preservation. MacArthur grants for housing organizations typically range from $200,000 to $1 million and focus on preserving existing affordable housing and advancing policy reform.
Robert Wood Johnson Foundation — Housing for Health
RWJF funds housing as a social determinant of health, supporting programs that prevent eviction, expand access to supportive housing, and address housing instability. Grants range from $250,000 to $2 million for multi-year projects with a clear health impact lens.
Local Community Foundation Housing Funds
Many community foundations maintain dedicated housing funds. Examples include the Silicon Valley Community Foundation's housing fund, the Greater Cincinnati Foundation's housing stabilization grants, and the Greater Washington Community Foundation's housing and community development grants. Contact your regional community foundation to identify local housing grant opportunities.
Key Terms for Housing Grant Applications
- Area Median Income (AMI): Most housing programs target households at 30%, 50%, 60%, or 80% of AMI. Know your project's income targeting before applying.
- Affordability period: Federal grants typically require units to remain affordable for 20–55 years. Be prepared to execute a land use restriction agreement.
- Match requirements: HOME requires a 25% match (with some exceptions). CDBG does not require a match but reviewers look favorably on leveraged funding.
- Community benefit agreement: Some local governments require CBAs for publicly funded housing developments, specifying local hiring, tenant protections, and community amenities.
Find Housing Grants on FindGrants
Affordable housing funding requires navigating federal, state, local, and foundation programs simultaneously. FindGrants.io indexes HUD programs, USDA housing grants, FHLB programs, and foundation housing funds in one searchable database. Filter by focus area, geography, and organization type to build a complete prospect list for your housing project.