PRO Housing Grant: $50M to Remove Barriers to Affordable Housing (FY 2026)

HUD's FY 2026 Pathways to Removing Obstacles to Housing (PRO Housing) NOFO makes $50 million available in 10 awards of $5 million to $10 million each for state and local governments that have already reformed — or are actively reforming — the zoning, permitting, and land-use rules that hold back affordable housing supply. Applications are due August 3, 2026 via Grants.gov. What makes FY 2026 different from prior rounds is the sharp new posture: HUD will award points primarily for what applicants have already done to remove regulatory barriers, and $35 million of the $50 million is reserved for applicants who have never received a PRO Housing award before.

What Is FY 2026 PRO Housing?

PRO Housing is a HUD Community Planning and Development (CPD) discretionary grant program authorized under the Consolidated Appropriations Act, 2026 (Pub. L. 119-75) and administered under the framework of the Community Development Block Grant (CDBG) program at Title I of the Housing and Community Development Act of 1974 and 24 CFR Part 570. Its purpose is to fund state and local governments to identify and remove barriers to affordable housing production and preservation — and to translate that regulatory work into actual units of affordable housing built or preserved during the grant period.

The FY 2026 round is aligned with the March 13, 2026 Executive Order Removing Regulatory Barriers to Affordable Home Construction. In practice, HUD has narrowed the program's focus: this is no longer a grant for jurisdictions that want funding to plan reform. It is a grant for jurisdictions that have already enacted reform and now need capital to deliver housing on the ground.

Notably, HUD is exercising its statutory authority under 42 U.S.C. § 5305(a) to waive certain CDBG restrictions and allow new construction of housing under this NOFO — ordinarily prohibited for CDBG entitlement grantees. New construction, preservation, homeownership assistance, and infrastructure that enables housing development are all on the table.

Who Can Apply

Eligibility is set at the entity level. Only the following types of applicants may apply directly for FY 2026 PRO Housing funds:

• State governments
• County governments
• City or township governments (including CDBG entitlement communities and non-entitlement local governments)
• Metropolitan Planning Organizations (MPOs) — as defined in Section 8 of the Federal Transit Act of 1991 (23 U.S.C. Section 134(b))
• Multijurisdictional entities — associations of local governments or public agencies bound by MOU, JPA, interstate compact, or similar collective agreement

Nonprofits, developers, and community-based organizations cannot apply directly — but they can partner with an eligible applicant as a subrecipient or contractor, and their staff time can be included as leverage. Prior FY 2023 and FY 2024 PRO Housing grantees remain eligible to apply, but they must propose an entirely new project, and they compete only for the $15 million portion of the $50 million not reserved for first-time applicants.

What PRO Housing Funds Can Do

Because PRO Housing operates under the CDBG framework, the eligible activities align with CDBG's basic categories — but the NOFO expands and reshapes them for housing production. Applicants must ensure that 51 percent of newly produced or preserved units directly benefit low- and moderate-income (LMI) individuals, and every activity must meet a CDBG national objective. Eligible activities include:

• New construction of affordable housing — enabled by HUD's waiver of the standard CDBG new-construction restriction under 42 U.S.C. § 5305(a)
• Preservation of existing affordable housing units
• Homeownership assistance (down payment, closing costs, etc., within CDBG limits)
• Acquisition of land or buildings for affordable housing use
• Infrastructure improvements that directly enable housing development (water, sewer, streets, sidewalks tied to specific housing units)
• Predevelopment costs (site studies, environmental review, engineering, market analysis)
• Rehabilitation of existing housing
• Code enforcement and similar preservation activities
• Planning and administration — capped at 10 percent of the award (for states, $100,000 plus 3 percent, and must match above $100,000)

What PRO Housing Cannot Do

The NOFO is unusually explicit about what will not be funded:

• Planning-only applications — the NOFO states these “will likely not score high enough to be funded.” PRO Housing is now a production grant, not a planning grant.
• DEI activities — per Executive Order 14151, applicants cannot use PRO Housing funds for programs, activities, or policies that promote DEI
• Activities that duplicate other federal awards or duplicate activities funded in a prior PRO Housing year
• Green-energy building requirements or non-evidence-based building codes (the NOFO explicitly rewards jurisdictions that have eliminated or sunset these)
• Retroactive application of new or changed building codes
• Activities inconsistent with the applicant's local Consolidated Plan
• General endorsements or letters of support as leverage — only firm, written, dated, on-letterhead commitments count

The FY 2026 Scoring Framework

PRO Housing FY 2026 is scored out of a total 104 possible points (100 base rating points + 4 preference points). Applications must earn at least 70 points to be considered for an award.

Rating Factor 1: Progress, Commitment, and Need (55 points)

This is the heaviest single factor in the NOFO, and it is where the FY 2026 round has departed most sharply from prior years. The bulk of the points reward what applicants have already enacted, not what they propose to enact.

1.a. Progress and Commitment via Deregulation (35 points). The 35 points split into two subgroups:

• Deregulation or improvements to existing laws and regulations (26 points). Points are awarded for demonstrated action to reduce regulatory barriers across four categories:
  • Land: unlocking land for residential housing development — expediting disposal of publicly-owned land, removing arbitrary limits on residential development beyond urban centers, allowing by-right development for single-family homes, adopting regulatory transparency
  • Construction: standardizing construction and renovation — no retroactive application of new codes, no local add-ons to state codes (except for disaster/resilience or cost reduction), no state add-ons to ICC codes, eliminating green-energy mandates and non-evidence-based codes, allowing manufactured and modular homes under objective standards
  • Time: accelerating construction — streamlining permitting, capping timelines, imposing binding “shot clocks” of <60 days for right-to-build and <30 days for construction permits/inspections, adopting a unified development ordinance, allowing third-party inspections, closing implementation loopholes, permit reciprocity
  • Cost: reducing barriers to housing — addressing input, financing, labor, and permitting cost drivers

  The NOFO is emphatic: “Applicants without a recent record of improvements to laws and regulations will not receive points in this section and will not receive a PRO Housing award.”

• Regulatory Best Practices (9 points). Up to 3 points each for up to 3 best practices from HUD's State and Local Best Practices for Home Construction. Applicants must cite specific enacted laws, regulations, or ordinances.

1.b. Acute Need for Affordable Housing (20 points). HUD will award 20 points only to applications that primarily serve a priority geography with affordable housing need above a threshold on one of three measures:

• Affordable housing not keeping pace with population (2011–2021 change in population vs. change in units affordable at 80% HAMFI)
• Insufficient affordable housing (households at 80% HAMFI divided by affordable and available units at 80% HAMFI)
• Widespread housing cost burden or substandard housing (households with housing problems at 100% HAMFI divided by total households at 100% HAMFI). Housing problems are defined as cost burden of at least 50%, overcrowding, or substandard housing.

The threshold is the need level of the 90th-percentile jurisdiction among places above 50,000 population. HUD has published a PRO Housing Mapping Tool and a spreadsheet identifying the priority geographies. Applications outside these geographies will not receive any of the 20 acute need points. State, MPO, and Multijurisdictional applicants can also qualify if the proposed geography scores in the top 5% of its state on the same measures.

Rating Factor 2: Soundness of Approach (40 points)

Rating Factor 2 evaluates whether the proposed project will actually result in units. It is scored across seven sub-factors:

• Units produced or preserved (10 points). How many units, at what income levels, homeownership vs. rental, new vs. preserved, and how each ties back to the specific barriers named in Rating Factor 1. HUD will rate higher applications that prioritize homeownership over rental, new construction over preservation, and mixed-income over entirely LMI housing.
• Outputs and outcomes (5 points). Quantifiable outputs must include: number of units, LMI persons served, new homeowners created, expected sale price or rent per unit type, cost effectiveness / subsidy per unit. Additional outputs may include increases in land area allowed for housing, associated infrastructure enabling new units, homes permitted, decrease in permit issuance time, reduction in discretionary approvals required, and increases in homes built using pre-approved floorplans.
• Site selection (3 points). Explains how project locations were chosen. Requires market analyses (comparable projects and their usage, sales comps, vacancy rates), and evidence of site control (deed, option, purchase contract). Extra weight for high-opportunity areas, Opportunity Zones, and rural areas.
• Budget (4 points). Must be submitted on Form HUD 424-CBW (this form is required — missing it is not curable). Narrative must state each activity, PRO Housing amount vs. other funds, expected units, size of units, per-unit PRO Housing amount, soft costs, contingencies, developer fees, reserves, funding gaps, and a scaling plan if awarded less than requested.
• Leverage (7 points). Not required, but scored. Scoring:
  • 120%+ of grant funds requested → 7 points
  • 90.00%–119.99% → 4 points
  • 75.00%–89.99% → 2 points
  • Below 75% → 0 points

  Leverage must be firmly committed by the application deadline, in a signed, dated commitment letter on the source's letterhead. Endorsements and letters of general support do not count. Non-financial contributions (staff time, land donations, community benefit agreements) are eligible when monetized per 2 CFR 200.306. Prior PRO Housing funds cannot be counted as leverage.

• Schedule (4 points). Milestones with start and completion dates, development schedule, permitting steps, procurement schedule if needed, and convincing projections that all activities complete within the 72-month performance period.
• Developer and program capacity (7 points). Developer name(s), credentials, experience with similar-sized projects, examples of federally-funded projects of similar scope, experience with federal requirements, financial capacity, and (for rentals) property management experience.

Rating Factor 3: Capacity (5 points)

Rating Factor 3 evaluates the applicant's own institutional capacity: experience managing federal grant funds, the specific agency/entity that will lead PRO Housing management, an organizational chart identifying key personnel, and capacity to manage the CDBG cross-cutting requirements (environmental reviews, income targeting, property standards, relocation). Applicants proposing to run a subgrant program must also describe how they will evaluate sub-applicants.

Preference Points (4 points)

Up to 4 preference points are available:

• Opportunity Zones (2 points) — if activities are within an OZ. Requires Form HUD-2996 (Certification for Opportunity Zone Preference Points) and at least 50% of the award used in Opportunity Zones.
• Rural Areas (2 points) — if more than 50% of proposed units are in rural areas. “Rural area” for this NOFO means any area outside a CDBG entitlement community, including areas that are not currently CDBG entitlement grantees and jurisdictions that have refused CDBG entitlement participation.

Application Format and Required Forms

Narrative Structure and Page Limits

The application narrative is capped at 25 total pages covering Exhibits A (Rating Factor 1), B (Rating Factor 2), and C (Rating Factor 3) combined. Formatting must be:

• Times New Roman, 12-point font
• Letter-size (8.5″ x 11″) paper
• 1-inch margins on all sides

Attachments A through E do not count toward the 25-page limit. Attachment D and E cover public participation evidence and are optional.

Required Standard Forms

Every application must include:

• SF-424 (Application for Federal Assistance)
• SF-424B (Assurances — Non-Construction Programs)
• SF-424D (Assurances — Construction Programs)
• HUD-424-B (Applicant Assurances and Certifications)
• HUD-2880 (Applicant/Recipient Disclosure/Update Report)
• Certification Regarding Lobbying and SF-LLL (if applicable)
• HUD-50070 (Certification for a Drug-Free Workplace) — if applicable
• HUD-2996 (Certification for Opportunity Zone Preference Points) — if applicable
• PRO Housing Certification (Certification of Consistency with the Consolidated Plan)

Required Budget Form

Form HUD-424-CBW is a mandatory budget submission. Although the form itself does not count against the page limit, it is a non-curable deficiency if missing. Any absence, and the application is out.

Selection Process and Screening

1. Application Screening — HUD screens each application against Key Eligibility Criteria and threshold requirements. Applications missing these are ineligible and receive no further review.
2. Cure Period for Curable Deficiencies — HUD will notify applicants by email of any curable technical deficiency. The window to correct is between 48 hours and 14 calendar days from the notice date.
3. Preliminary Rating and Ranking — reviewers score each eligible application per Rating Factors 1, 2, and 3 and rank applications by total score.
4. Final Panel Review — a final panel confirms scoring, assigns final scores, and ranks in score order.
5. Selection Considerations — HUD reserves the right to fund out of rank order to ensure geographic diversity and to prioritize benefit to LMI residents. HUD may fund in whole or in part, at less than requested, or elect to fund no applications at all.

Tie-breakers: If two applications tie and there aren't enough funds for both, HUD selects the highest score on Rating Factor 1 (Progress/Commitment/Need), then Rating Factor 2 (Soundness), then Rating Factor 3 (Capacity).

Risk Review: Before making an award, HUD conducts a risk review evaluating past performance (federal grant management history, on-time reporting, audit findings), organizational health (financial stability, management systems, staffing), and results. HUD may adjust award terms or impose specific conditions based on the risk review.

Post-Award Requirements

Reporting

PRO Housing grantees will report through HUD's Disaster Recovery Grant Reporting (DRGR) system. Required reports include:

• Quarterly expenditure reports in DRGR (mandatory)
• Annual performance reports
• Federal Financial Report (SF-425) per 2 CFR 200.328
• FFATA reporting per 2 CFR Part 170 for subawards of $30,000 or greater
• Race, ethnicity, and demographic reporting on assisted households, as requested by HUD
• Grantee milestones become binding once HUD approves the program schedule; adjustments require prior HUD approval

Failure to report can result in suspension of grant funds until reporting is caught up and HUD-approved.

Environmental Review

PRO Housing grantees must complete environmental review under 24 CFR Part 58 (Responsible Entity) or 24 CFR Part 50 (HUD-performed). No grant funds may be expended on acquisition, rehabilitation, conversion, lease, repair, disposal, demolition, or construction until the applicable environmental review is complete and, where required, the Request for Release of Funds (RROF) has been approved.

Cross-Cutting Requirements

All PRO Housing awards are subject to the standard CDBG framework at 24 CFR Part 570 (subparts A, C, D, J, K, and O for local governments; subpart I for states, though HUD waives the state method-of-distribution requirement for this NOFO). Additional requirements include:

• Build America, Buy America (BABA) — 2 CFR Part 184
• Uniform Relocation Assistance and Real Property Acquisition Policies Act — 49 CFR Part 24
• Uniform Administrative Requirements at 2 CFR Part 200 (Uniform Guidance)
• Fair Housing Act, Affirmatively Furthering Fair Housing (AFFH)
• Section 3 (Economic Opportunities for Low- and Very Low-Income Persons) — 24 CFR Part 75
• Section 504, ADA, and Uniform Federal Accessibility Standards for covered multifamily housing
• Lead-Based Paint Rules for pre-1978 housing
• Applicable Presidential Executive Actions, including EO 14332 (Improving Oversight of Federal Grantmaking), EO 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity), EO 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing), EO 14218 (Ending Taxpayer Subsidization of Open Borders), and other EOs listed in the NOFO.

Practical Guidance for FY 2026 Applicants

1. Take the “Recent Record” Language Seriously

The FY 2026 NOFO is explicit: applicants without a recent record of improvements to laws and regulations will not receive points on Rating Factor 1.a and will not receive a PRO Housing award. Before spending time on any narrative, the honest first question is: what have we enacted in the last few years across Land, Construction, Time, and Cost that we can cite with specific ordinance or law numbers? If the answer is thin, this is likely not the round to apply.

2. Confirm You Are Inside a Priority Geography

The 20-point Acute Need bucket depends entirely on whether the primary project area meets HUD's threshold on at least one of the three need measures. HUD's PRO Housing Mapping Tool and companion spreadsheet at the HUD Exchange are the authoritative sources — check before drafting the narrative. State, MPO, and Multijurisdictional applicants have a slightly wider path (top 5% within state) but should still verify.

3. First-Time Applicants Have a Real Set-Aside

$35 million of the $50 million is reserved for applicants that have not received a prior PRO Housing award. If your jurisdiction has never applied — or applied but was not selected — the effective competition is over roughly 7 awards out of that $35 million, not the full 10.

4. Prioritize Homeownership and New Construction in Your Unit Mix

Under Rating Factor 2.1 (10 points), HUD explicitly states it will rate higher applications that prioritize homeownership over rental, new construction over preservation, and mixed-income over entirely LMI housing. That is the point-scoring bias in FY 2026.

5. Do Not Skip the HUD-424-CBW Budget Form

Missing the HUD-424-CBW is a non-curable deficiency. Assemble a complete budget on the correct form before the deadline — this is the single most common way otherwise-strong applications get eliminated.

6. Get Leverage Commitments in Writing Early

Leverage is worth up to 7 points, but only firm, dated commitments on letterhead count. Verbal endorsements, general letters of support, and pledged-but-unsigned commitments will not be counted. Start collecting commitment letters weeks before the deadline — especially for staff-time leverage from partners, which must be monetized and documented per 2 CFR 200.306.

7. Cite Specific Ordinance and Law Numbers, Not Aspirations

The FY 2026 NOFO is designed to distinguish jurisdictions that have done the work from those still planning it. Every claim in Rating Factor 1.a should point to an enacted ordinance, law, or regulation with its number and enactment date. General claims about “streamlining” or “working toward” reform score poorly. Where an enacted change is dated after the March 13, 2026 Executive Order, call that out — alignment with the current administration's priorities is weighted throughout selection considerations.

8. Confirm Consistency with Your Consolidated Plan

The FY 2026 PRO Housing Certification of Consistency with the Consolidated Plan is required. Any activities proposed must be consistent with your local Consolidated Plan or you must be able to amend the plan in time. This is a check-the-box requirement but a common trip-up for entities whose Con Plan predates the reform agenda they now want to advance.

Submission Details

Applications must be submitted electronically through Grants.gov. HUD strongly recommends submitting at least 48 hours before the deadline to allow time to correct Grants.gov validation errors. A 24-hour grace period after the deadline is available only if Grants.gov rejected the application before the deadline.

Applicants must be current on SAM.gov registration with a valid UEI before applying. Lack of SAM registration or an expired UEI is not good cause for a deadline extension or paper-application waiver.

Paper application waivers require a written request submitted at least 15 calendar days before the deadline, and must show good cause (such as a documented power or internet service disruption at the applicant's business office).

Contact Information

• Program Contact: B. Cory Schwartz, HUD Office of Block Grant Assistance / Community Planning and Development
• Program Email: CDBG-PROHousing@hud.gov
• Program Phone: 202-402-4105
• Program Website: HUD PRO Housing Program Page
• PRO Housing Mapping Tool: Available on the HUD Exchange
• Grants.gov Support: 1-800-518-4726 / support@grants.gov
• SAM.gov Support: 866-606-8220

How Avila Can Help

FY 2026 PRO Housing is a demanding NOFO on a tight timeline: 55 of the 100 rating points reward what has already been enacted, applicants have to fit their entire Exhibit A/B/C narrative into 25 pages, and a missing HUD-424-CBW takes an application out of the running before it can be scored. For city and county housing offices, MPOs, and multijurisdictional entities pulling together an application in the next three weeks, coordination across planning, legal, finance, and development staff is the whole game.

Avila's AI-powered platform helps local governments work the PRO Housing application efficiently:

• Parsing the NOFO and mapping every rating factor and threshold to a specific narrative deliverable
• Cataloging enacted ordinances, laws, and regulations against HUD's Land / Construction / Time / Cost categories for Rating Factor 1.a citations
• Confirming priority-geography eligibility and pulling the underlying HAMFI need data
• Tracking SAM.gov / UEI status, Consolidated Plan consistency, and the full required-forms checklist — including the non-curable HUD-424-CBW
• Coordinating leverage commitment letters and monetized staff-time contributions across partners

Ready to explore how Avila can support your FY 2026 PRO Housing application? Book a demo to learn more.

For related federal-grant guides, see our posts on the FY 2026 CHBP Bridge Grant, the FY 2026 EOC Grant Program, and the 2 CFR 200 Rewrite for Local Governments. For registration prerequisites, see SAM.gov registration, UEI numbers, and Grants.gov registration.