- $60 million HUD funding freeze impacts 200+ housing initiatives
- Nonprofits Enterprise and LISC lose grant distribution contracts
- Every $1 in grants leverages $95 in private investment
- Biloxi’s 36-unit development delayed amid permit funding crisis
- HUD cites efficiency goals, nonprofits plan appeals
The Trump administration’s abrupt cancellation of two federal contracts has suspended nearly $60 million in housing grants, according to documents obtained by the Associated Press. The Department of Housing and Urban Development (HUD) terminated agreements with Enterprise Community Partners and Local Initiatives Support Corporation (LISC), nonprofits tasked with distributing Section 4 funds to grassroots housing organizations. These grants typically cover pre-development costs like environmental reviews and permit fees, which are critical for securing larger investments.
Mississippi’s Gulf Coast exemplifies the crisis. Jonathan Green, director of a Biloxi nonprofit, revealed that $20,000 in stalled grants has halted progress on a 36-unit complex in East Biloxi—a region still recovering from Hurricane Katrina. With 95 households already on a waitlist, Green warns that delays could derail partnerships with investors. “Without upfront funds for permits and studies, projects lose momentum permanently,” he stated.
Shaun Donovan, CEO of Enterprise, emphasized the ripple effect: Nonprofits have already hired contractors and counselors using anticipated grants. Immediate work stoppages could eliminate 1,500+ temporary jobs. Moreover, HUD’s decision jeopardizes a proven funding model where modest grants unlock massive private investments. For every federal dollar distributed by Enterprise, local groups secure $95 from other sources.
HUD claims the cancellations align with a government efficiency initiative, though critics argue the move targets diversity programs. Both nonprofits are appealing the decision, but with no timeline for resolution, housing advocates fear irreversible damage. As construction costs rise 8% annually, stalled projects may become financially unviable, deepening the U.S. affordable housing shortage.
