Affordable Housing Grants for Nonprofits
Affordable housing grants fund one of the most capital-intensive sectors in nonprofit work — development, rehabilitation, and preservation of affordable rental and homeownership housing. Housing nonprofits access funding from a complex mix of federal programs, state housing finance agencies, Federal Home Loan Banks, and private foundations. Unlike most grant programs, affordable housing financing typically involves layering multiple funding sources: a federal tax credit equity investment, a permanent mortgage, soft second mortgages, and grant funding filling the gap between costs and what low-income households can afford. This guide explains the major grant sources for housing nonprofits and how they fit together.
HUD Grant Programs for Housing Nonprofits
Community Development Block Grant (CDBG)
CDBG is the most flexible HUD grant program for housing nonprofits. Entitlement communities (cities over 50,000 and urban counties) receive annual CDBG allocations and deploy them through competitive local processes. State CDBG programs fund smaller communities. Eligible housing activities include homeowner rehabilitation, homebuyer assistance, site acquisition, demolition of blighted structures, and public services related to housing. Nonprofits apply to their local entitlement jurisdiction (city or county community development department) for CDBG funds — not directly to HUD.
HOME Investment Partnerships Program
HOME is the largest federal block grant for housing development and rehabilitation. HUD allocates HOME funds to states and Participating Jurisdictions (cities and counties). At least 15% of each jurisdiction's HOME funds must be awarded to Community Housing Development Organizations (CHDOs) — qualified nonprofits that develop affordable housing. HOME funds can finance new construction, acquisition and rehabilitation, and homebuyer assistance. Nonprofits apply through their local HOME Participating Jurisdiction and, if eligible, through the CHDO certification process that gives them access to the CHDO set-aside.
Section 4 Capacity Building for Community Development and Affordable Housing
HUD's Section 4 program provides grants to national intermediaries (NeighborWorks America, LISC, Enterprise Community Partners, and Habitat for Humanity International) for capacity building of local housing nonprofits. These intermediaries subgrant technical assistance, training, and operating support to their local network members. Joining a NeighborWorks or LISC network is a primary pathway to Section 4-funded capacity building.
Choice Neighborhoods Initiative
Choice Neighborhoods provides competitive grants to cities to transform distressed public housing and the surrounding community. Nonprofit developers and CDCs that partner with housing authorities on Choice Neighborhoods transformations access substantial grant funding. Planning grants (up to $500,000) and Implementation grants (up to $50 million) are the two program tiers.
Federal Home Loan Bank (FHLB) Affordable Housing Program (AHP)
The FHLB Affordable Housing Program is one of the largest private sources of housing grants in the United States, distributing approximately $350–400 million annually across 11 regional FHLBanks. AHP competitive grants fund affordable housing development and rehabilitation projects sponsored by nonprofits in partnership with FHLB member banks. Nonprofits must partner with a member financial institution to access AHP grants. Grant amounts range widely by project; competitive projects typically receive $500,000 to $2 million. Contact your regional FHLB to identify member banks in your area and learn about their AHP application cycle.
Low-Income Housing Tax Credits (LIHTC)
LIHTC is the primary financing mechanism for affordable rental housing development, though it is technically a tax credit rather than a grant. State housing finance agencies (HFAs) allocate LIHTC to housing developers through a competitive Qualified Allocation Plan (QAP) process. Nonprofit developers (or developments with nonprofit sponsors) receive a 10% set-aside in each state's LIHTC allocation. The tax credit equity invested by corporate investors functions like a grant — it does not require repayment. Understanding LIHTC is essential for housing nonprofits pursuing rental housing development.
NeighborWorks, LISC, and Enterprise
NeighborWorks America, the Local Initiatives Support Corporation (LISC), and Enterprise Community Partners are national intermediaries that provide both grants and technical assistance to local housing nonprofits. NeighborWorks distributes HUD Section 4 capacity building grants to its 240+ chartered member organizations. LISC and Enterprise both administer their own grantmaking alongside complex financing packaging for affordable housing developments. Becoming a NeighborWorks chartered member, or developing a relationship with your local LISC or Enterprise office, is a foundational step for housing nonprofits scaling to larger developments.
Foundation Funding for Housing Nonprofits
Private foundation funding for affordable housing has grown significantly. Key funders include: the JPMorgan Chase Foundation through its AdvancingCities initiative; the Wells Fargo Foundation for housing counseling and community development; the Kresge Foundation for affordable housing in low-income communities; the Robert Wood Johnson Foundation for housing as a health determinant; the MacArthur Foundation's Safety and Justice Challenge and housing stability work; the Ford Foundation for housing policy and equitable development; and the Robert W. Woodruff Foundation (Atlanta) for affordable housing in the Southeast. Many community foundations prioritize housing as a root cause of economic instability.
Application Tips for Housing Nonprofits
- CHDO certification: If you plan to develop or rehabilitate housing using HOME funds, pursue CHDO certification through your local HOME Participating Jurisdiction. CHDO-certified organizations access the 15% set-aside that non-CHDOs cannot reach.
- FHLB member bank partnerships: Identify two or three FHLB member banks in your area and develop relationships with their CRA officers before the AHP cycle opens. Banks often sponsor only a handful of AHP applications annually — your relationship determines whether they choose your project.
- Layer funding sources: Successful affordable housing projects combine CDBG, HOME, AHP, LIHTC equity, and permanent debt. Understanding how these sources fit together — and which covers what kinds of costs — is prerequisite knowledge for housing development grant applications.
- Market study and site control: HUD, FHLB, and state HFA applications require site control documentation (option agreement or purchase contract) and market studies demonstrating demand for affordable units in the target area. Line these up before the application deadline.
Find Housing Grants with FindGrants
Affordable housing financing involves more funding sources than almost any other nonprofit sector — HUD, FHLB, state HFAs, LIHTC, CDBG, HOME, private foundations, and corporate CRA investments. FindGrants.io indexes housing grant opportunities matched to your organization type, geography, and program focus. Search affordable housing grants across federal, state, and foundation sources — and identify the best opportunities for your next development.