The Department of Housing and Urban Development has reportedly cut two of the three organizations authorized to participate in the Capacity Building for Affordable Housing and Community Development Program, known as the Section 4 program.
The Trump administration has stopped, at least temporarily, $60 million intended for affordable housing developments nationally by “throwing hundreds of projects into a precarious limbo,” as the Associated Press reported.
Congress had chosen three nonprofits to distribute grants to local community development nonprofits, mostly serving as seed funding for affordable housing that helped attract more public and private investment.
The three organizations are Enterprise Community Partners in Columbia, Maryland; Local Initiatives Support Corporation (LISC) in New York City; and Habitat for Humanity International in Americus, Georgia.
According to documents the AP reported seeing, HUD said it was canceling contracts with the first two, putting millions of dollars in promised or yet-to-be-awarded grants into limbo. One of the termination letters said the Department of Government Efficiency had directed the cancellation because the group’s operations “were not in compliance” with a Trump executive order targeting DEI initiatives. The letter also allows the organizations to appeal the termination.
A HUD spokesperson told the AP that the program isn’t being discontinued but that “the department is consolidating some grants while others remain.”
In a published statement on its website, LISC said that since Section 4 started in 1993, the community developer had sent funding to 1,425 nonprofit groups in 349 metro areas and rural communities.
Enterprise Community Partners received the termination notification on February 26, according to a statement on its site. The organization said it had deployed funding to more than 700 nonprofits resulting in the creation or preservation of 45,000 affordable homes.